How tariffs on China could increase smartphone, tablet prices
China is a dominant production engine for tech gear — including for American companies like Apple that have their products assembled in the country — accounting for 78 per cent of U.S. smartphone imports in 2023, according to the Consumer Technology Association trade group. Technology analyst Carmi Levy outlines the expansive impact of U.S. tariffs on China in the tech world.
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Globe and Mail
3 hours ago
- Globe and Mail
Apple Stock Warning: Tariffs, Weak Smartphone Demand to Hit AAPL in 2025
Smartphone sales have driven substantial revenue growth for major technology firms in recent years. However, 2025 may present notable challenges as consumer demand moderates and trade policy uncertainties intensify. Apple (AAPL) is particularly exposed to these headwinds, experiencing slow growth amid tariff uncertainty. Recently, Apple received worse news from Counterpoint Research, which has revised its 2025 global iPhone shipment growth forecast downward to 2.5% year-over-year from an earlier projection of 4%. The adjustment is attributed to 'renewed uncertainties surrounding U.S. tariffs' and weakening demand across North America, Europe, and parts of Asia. Although smartphones were initially excluded from April's reciprocal tariff announcement, the lingering risk has prompted Apple to increase production in India rather than China. Simultaneously, competition in China has intensified, with domestic manufacturers rapidly integrating advanced features such as artificial intelligence into their devices. About Apple Stock With a market capitalization of around $3 trillion, Apple continues to lead the consumer technology sector by seamlessly integrating hardware, software, and services. The company generates revenue through the sale of iPhones, Macs, wearables, and digital subscriptions via its global retail and online platforms. Apple's heavy investment in research and development, combined with its strong brand loyalty, contributes to its impressive profitability. It boasts net profit margins around 24%, far exceeding the industry average of 4%. This financial strength gives Apple a competitive edge. However, despite its impressive margins, Apple faces several headwinds. Sales have been declining, particularly in China, due to intensifying competition from domestic brands. Additionally, some analysts argue that Apple is falling behind in AI innovation and product development, raising concerns about its long-term ability to lead in a rapidly evolving tech landscape. Reflecting these concerns, Apple has underperformed over the past year, gaining just 2.3% compared to the S&P 500's ($SPX) 12.6% return during the same period. At the current price point, AAPL's valuation is notably high, with a price-sales ratio of 7.6x, significantly above the sector median of 3x, suggesting the stock is expensive compared to its peers. iPhone Slowing Growth Amid China Heat Apple's iPhone sales showed modest growth in the latest quarter but face mounting headwinds that could dampen demand in 2025. In fiscal Q2, iPhone revenue climbed 1.9% year-over-year to $46.8 billion, contributing to total quarterly sales of $95.4 billion, up 5% from a year earlier. Despite this uptick, several factors point to softer demand ahead. In Greater China, revenues slid 2.3% as local competitors rolled out AI-driven features and government subsidy programs favored domestic brands. By contrast, revenues in the Americas and the Asia-Pacific regions both grew roughly 8%, fueled by continued U.S. strength and India-based production mitigating tariff impacts; Japan led all regions with a 17% jump. Compounding these regional challenges, trade policy clouds the broader outlook. CEO Tim Cook warned that prospective U.S. tariffs on electronics could impose about $900 million of extra costs in the June quarter. Even though iPhones were spared in April's reciprocal duties announcement, the uncertainty has driven Apple to shift a larger share of production from China to India and Vietnam. As discussed earlier, Counterpoint Research forecasts global smartphone shipments will grow just 2% in 2025, citing tariff anxiety and weakening consumer appetite across North America, Europe and parts of Asia. With these crosscurrents, tariff risk, intensifying competition in China and cooling Western demand, Apple's 2025 iPhone outlook appears increasingly challenged. Where Apple Could Gain Momentum Despite looming headwinds, there are still strategic positives for Apple. The $500 billion U.S. investment plan, including a new Texas factory for advanced server manufacturing and increased chip sourcing from Arizona, signals a long-term commitment to innovation and domestic production. Additionally, Apple is diversifying its supply chain by shifting iPhone production to India and moving iPad and Mac assembly to Vietnam. These steps reduce reliance on China, helping Apple mitigate geopolitical risks, avoid tariffs, and ensure more stable operations. While these changes may raise short-term costs, they enhance supply chain resilience and position Apple for stronger global competitiveness. On the operating expenses front, rising R&D spending underscores Apple's all-in push on AI integration across iPhones, Macs, and Vision Pro, with rumoured smart glasses to follow. Bloomberg's Mark Gurman reports significant chip progress for these wearables. However, Apple's late AI entry risks its AI ambitions aging like previously stalled concepts. What Do Analysts Think About Apple Stock? Wall Street remains cautiously optimistic about Apple's growth prospects with a consensus 'Moderate Buy' rating. Of the 37 analysts offering recommendations, 18 give it a solid 'Strong Buy,' three suggest a 'Moderate Buy,' 13 advocate 'Hold,' one 'Moderate Sell,' and the remaining two give a 'Strong Sell.' The average analyst price target of $231 suggests that the stock could rise by around 15% from current levels.
Vancouver Sun
5 hours ago
- Vancouver Sun
Elbows-up tourism surge could see sector ‘eke out' a gain even as Americans stay away
From the front desk of Hotel Bedford in Goderich, Ont., Lynda Cross welcomes guests from regions ranging from southern Ontario to the South Pacific. 'A lot of them come from Toronto,' said the manager, standing just inside the Romanesque arches of the 129-year-old establishment. 'Just lately, we've had a few groups come from Australia' — a first, she said. But one crop of tourists has been conspicuously absent this year: Americans. 'May and June have been slow.' Plan your next getaway with Travel Time, featuring travel deals, destinations and gear. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Travel Time will soon be in your inbox. Please try again Interested in more newsletters? Browse here. A groundswell of economic patriotism has stoked curiosity in Canadian destinations, fuelling a domestic bookings surge as travellers turn away from cross-border trips. But a drop in American visitors north of the border and fears that many Canadians will simply stay home to save money has many wondering whether homegrown and overseas tourism can make up for the stateside decline. Canadian vacationers' boycotting the U.S. could net this country's tourism sector up to $8.8 billion in extra business this year as travellers explore spots closer to home, according to a report from the Conference Board of Canada. An April survey on travel intentions prompted the group to predict a windfall despite fewer border crossings this year by American tourists — Canada's largest source of inbound travellers by far. The number of Americans who visited Canada by car fell nearly 11 per cent in April compared with the same month last year, the third straight month of year-over-year decreases, according to Statistics Canada. While trip numbers for Canadians heading to the U.S. have fallen off far more steeply as part of a backlash against U.S. President Donald Trump's tariffs and '51st state' threats, Americans' more moderate pullback owes to factors ranging from pinched pocketbooks to fears of feeling unwelcome to angst over the border crossing on the drive home. The American retreat could hit communities that hug the border especially hard. 'Border towns that have tended to experience the shorter, more frequent back-and-forth visits — those are going to be communities that are going to be more heavily affected,' said Andrew Siegwart, who heads the Tourism Industry Association of Ontario. Duty-free stores have seen their revenue drop by 60 to 80 per cent in the last few months, according to an association representing 32 of the mostly mom-and-pop shops. Whether overseas travellers can make up for much of the lower American traffic across the country is questionable. Visitor volume from China, previously a key source of tourists, sat at 40 per cent of 2019 levels last year amid ongoing restrictions on group travel to Canada, according to Destination Canada. The federal government imposed new visa requirements on Mexican visitors last year, making it harder for tourists from that country to come. 'Travel from India has also been down for a number of reasons. So it's going to take some time,' said Siegwart. However, many America-averse Canadians are spending their travel budget in their own backyards. More than half of respondents to a survey released Monday by Ontario's travel regulator said they were more likely to make excursions closer to home, with the trend holding across all age groups. 'It could be a year where we manage to stay on par with last year, or maybe even eke out a little bit of a gain,' said Siegwart. But he acknowledged the hurdle of consumer anxiety over the economy. 'I'm cautiously optimistic,' he said, 'but it's too early to tell.' Summer bookings were either the same or higher than last year at two out of three businesses surveyed by the association in a poll released last month. John Steele, who owns seven hotels in Newfoundland and Labrador and one in Fredericton, said visitor levels look 'pretty good' at most of his properties but softer in Gander. New direct flights to St. John's from London and Paris have made it easier for international travellers to come from away. 'Air access seems to be improving for us. That's a big thing for us,' Steele said. At Okanagan Wine Country Tours in British Columbia, bookings from Europe and the United Kingdom have risen about 20 per cent year-over-year, said partner and manager Marsha Morrish. 'The traffic from Quebec is up substantially,' she added. Americans are more tepid — even those who do head north. 'They did email me to do a bit of a temperature check on how Canadians were feeling about Americans visiting,' Morrish said, referring to a Colorado couple coming up to sample Pinot Gris. While there's a chance American tourist numbers could surge, it's unlikely to happen this year, Siegwart suggested — including for corporate gatherings. 'Some convention centres, both in Ontario and across the country, have seen some drops in American conference bookings.' Much of it has to do with personal safety and security, as some workers worry about how they'll be treated at the border. 'Depending on your immigration status, depending on if you're a member of an LGBTQIA community, if your gender markers or identities on your passports are different than your gender expression — all sorts of things like that are really coming into play,' Siegwart said. 'My colleagues south of the border are a little more cautious in how they plan things because of the unpredictable way in which their administration is conducting business.' On the flip side, there's more interest from corporate event planners in Europe 'who still want to come to North America but see Canada as a safer bet.' Some Americans remain undeterred though. 'I've seen way more people from the States this year,' said Wendy Mooney, owner of Country Hideaway RV Campground, which sits barely a kilometre from the border in the B.C.'s West Kootenay region. 'Some people just fly by the seat of their pants.'
Winnipeg Free Press
6 hours ago
- Winnipeg Free Press
Elbows-up tourism surge could see sector ‘eke out' a gain even as Americans stay away
From the front desk of Hotel Bedford in Goderich, Ont., Lynda Cross welcomes guests from regions ranging from southern Ontario to the South Pacific. 'A lot of them come from Toronto,' said the manager, standing just inside the Romanesque arches of the 129-year-old establishment. 'Just lately, we've had a few groups come from Australia' — a first, she said. But one crop of tourists has been conspicuously absent this year: Americans. 'May and June have been slow.' A groundswell of economic patriotism has stoked curiosity in Canadian destinations, fuelling a domestic bookings surge as travellers turn away from cross-border trips. But a drop in American visitors north of the border and fears that many Canadians will simply stay home to save money has many wondering whether homegrown and overseas tourism can make up for the stateside decline. Canadian vacationers' boycotting the U.S. could net this country's tourism sector up to $8.8 billion in extra business this year as travellers explore spots closer to home, according to a report from the Conference Board of Canada. An April survey on travel intentions prompted the group to predict a windfall despite fewer border crossings this year by American tourists — Canada's largest source of inbound travellers by far. The number of Americans who visited Canada by car fell nearly 11 per cent in April compared with the same month last year, the third straight month of year-over-year decreases, according to Statistics Canada. While trip numbers for Canadians heading to the U.S. have fallen off far more steeply as part of a backlash against U.S. President Donald Trump's tariffs and '51st state' threats, Americans' more moderate pullback owes to factors ranging from pinched pocketbooks to fears of feeling unwelcome to angst over the border crossing on the drive home. The American retreat could hit communities that hug the border especially hard. 'Border towns that have tended to experience the shorter, more frequent back-and-forth visits — those are going to be communities that are going to be more heavily affected,' said Andrew Siegwart, who heads the Tourism Industry Association of Ontario. Duty-free stores have seen their revenue drop by 60 to 80 per cent in the last few months, according to an association representing 32 of the mostly mom-and-pop shops. Whether overseas travellers can make up for much of the lower American traffic across the country is questionable. Visitor volume from China, previously a key source of tourists, sat at 40 per cent of 2019 levels last year amid ongoing restrictions on group travel to Canada, according to Destination Canada. The federal government imposed new visa requirements on Mexican visitors last year, making it harder for tourists from that country to come. 'Travel from India has also been down for a number of reasons. So it's going to take some time,' said Siegwart. However, many America-averse Canadians are spending their travel budget in their own backyards. More than half of respondents to a survey released Monday by Ontario's travel regulator said they were more likely to make excursions closer to home, with the trend holding across all age groups. 'It could be a year where we manage to stay on par with last year, or maybe even eke out a little bit of a gain,' said Siegwart. But he acknowledged the hurdle of consumer anxiety over the economy. 'I'm cautiously optimistic,' he said, 'but it's too early to tell.' Summer bookings were either the same or higher than last year at two out of three businesses surveyed by the association in a poll released last month. John Steele, who owns seven hotels in Newfoundland and Labrador and one in Fredericton, said visitor levels look 'pretty good' at most of his properties but softer in Gander. New direct flights to St. John's from London and Paris have made it easier for international travellers to come from away. 'Air access seems to be improving for us. That's a big thing for us,' Steele said. At Okanagan Wine Country Tours in British Columbia, bookings from Europe and the United Kingdom have risen about 20 per cent year-over-year, said partner and manager Marsha Morrish. 'The traffic from Quebec is up substantially,' she added. Americans are more tepid — even those who do head north. 'They did email me to do a bit of a temperature check on how Canadians were feeling about Americans visiting,' Morrish said, referring to a Colorado couple coming up to sample Pinot Gris. While there's a chance American tourist numbers could surge, it's unlikely to happen this year, Siegwart suggested — including for corporate gatherings. 'Some convention centres, both in Ontario and across the country, have seen some drops in American conference bookings.' Much of it has to do with personal safety and security, as some workers worry about how they'll be treated at the border. 'Depending on your immigration status, depending on if you're a member of an LGBTQIA community, if your gender markers or identities on your passports are different than your gender expression — all sorts of things like that are really coming into play,' Siegwart said. 'My colleagues south of the border are a little more cautious in how they plan things because of the unpredictable way in which their administration is conducting business.' Monday Mornings The latest local business news and a lookahead to the coming week. On the flip side, there's more interest from corporate event planners in Europe 'who still want to come to North America but see Canada as a safer bet.' Some Americans remain undeterred though. 'I've seen way more people from the States this year,' said Wendy Mooney, owner of Country Hideaway RV Campground, which sits barely a kilometre from the border in the B.C.'s West Kootenay region. 'Some people just fly by the seat of their pants.' This report by The Canadian Press was first published June 9, 2025.
