Apple waps itself against trade war with drastic measures

The American tech giant Apple announced radical steps yesterday to protect itself against the rising tensions in world trade. In response to the increasing impact of President Donald Trump’s protectionist trade policy, the company reduces its share purchasing by $ 10 billion and partially reduces Chinese production. Reuters announces this.

Stock buying reduced and production moved

CEO Tim Cook reported during an analyst call that the input rates for the company yield around $ 900 million extra costs this quarter. Apple has therefore decided to reduce its share purchasing program to $ 100 billion. This is $ 10 billion less than a year earlier.

According to analysts, this step points out that the company is preparing for economically heavier times. By spending $ 10 billion less on stock buying, they, as it were, create a financial buffer. This is a clear indication of the company’s future forecast.

At the same time, Apple adjusts its supply chain radically. The majority of the iPhones for the American market comes from India this quarter, while other devices such as iPads and Macs from Vietnam are supplied. With that, Apple wants to reduce the dependence on China. Products for other markets will largely still be produced in China.

American investment of $ 500 billion

Apple also invests heavily in American production capacity. The company wants to put $ 500 billion in the construction of chip and server factories in Texas, Arizona and California, among others. According to Cook, this is not only about capital investments, but also higher operational costs.

For the first tax quarter, Apple reported a turnover of $ 95.36 billion. This is slightly higher than the expectation of $ 94.68 billion. The profit per share was $ 1.65. The sale of iPads and Macs in particular exceeded expectations.

Yet the prospects remain moderate. Apple expects sales growth in the low to middle single -digit percentages. The gross margin is expected to fall to 45.5 to 46.5%. This is based on the average expectation of analysts.

Apple did increase its dividend by 4% and therefore continues to reward shareholders, despite the increasing economic headwind. But it is clear that the company adapts to current circumstances and waps itself.