SCOTUS ruling & US-China trade war 'not a threat' to Apple's growth potential

Posted:
in AAPL Investors
Although there's a "very real risk" from more tariffs on Apple products, and this week's Supreme Court ruling laid the groundwork for a challenge to the App Store, neither is a "threat to future growth potential," Cowen analysts said on Tuesday.

US 20 dollar bill


The impact from both problems "can be moderated over time," Cowen said in an investor memo. "We maintain our positive view on Apple stock and believe our thesis for Services business growth and stable hardware product sales longer term remains under-appreciated by the market," the firm wrote.

Cowen nevertheless warned that Apple's earnings per share (EPS) could be slashed by 14% if an expansion of Trump administration tariffs on Chinese goods takes effect in June. That could see a 25% levy on products like iPhones, iPads, and MacBooks, which are primarily assembled in China by companies like Foxconn and Pegatron.

iPhones alone could knock 6 to 7% off EPS, Cowen said. That's assuming Apple decides to absorb the hit from tariffs -- if it hikes prices to compensate, EPS could drop $0.14 to to $0.58 per share, based on "demand destruction" of 10 to 40%. That would amount to 1 to 4% of forecast fiscal 2020 EPS.

The Supreme Court ruling "increases the probability that Apple may have modest financial risk due to monetary awards," the memo continued. While it only allows the Apple v. Pepper case -- over App Store monopoly accusations -- to continue, should the plaintiffs win, Apple could end up paying between $3.1 billion and $9.2 billion in compensation if it doesn't settle out of court.

Thankfully for Apple, Cowen noted, it could be 18 to 24 months before any payouts happen, assuming it doesn't emerge victorious.

Cowen is holding onto an "outperform" rating for Apple stock with a $245 price target.
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Comments

  • Reply 1 of 28
    spice-boyspice-boy Posts: 795member
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    randominternetpersonlolliver
  • Reply 2 of 28
    lkrupplkrupp Posts: 6,956member
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    So what’s your solution to China's blatant thievery of technology and intellectual property, and the dumping of Chinese steel and other durable goods at prices no American producer can match? Keep “talking”  to them in hopes they will mend their ways? When someone comes in with the predictable negative response to these tariffs I always ask what solution they recommend other than simply capitulating to China and accepting our new role of a second rate economy controlled by and at the mercy of China.

    So let’s hear your solution. Or is it just because #45 is doing it and that makes it bad?
    airnerdlowken
  • Reply 3 of 28
    lkrupp said:
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    So what’s your solution to China's blatant thievery of technology and intellectual property, and the dumping of Chinese steel and other durable goods at prices no American producer can match? Keep “talking”  to them in hopes they will mend their ways? When someone comes in with the predictable negative response to these tariffs I always ask what solution they recommend other than simply capitulating to China and accepting our new role of a second rate economy controlled by and at the mercy of China.

    So let’s hear your solution. Or is it just because #45 is doing it and that makes it bad?
    I think spice-boy’s post echos a lot of people’s frustration about these tarrifs and whether they have helped or hurt Americans and our economy. 

    Your points are valid about the crimes China has committed, but is #45’s solution helping, or hurting us in the long term?
    It doesn’t help when it appears that #45 does not know how tarrifs work and who will bear the brunt of higher costs. 

    The flip side is that Wall St. acts hysterically whenever the threat of any punitive measure is talked about.


    lolliver
  • Reply 4 of 28
    sdw2001sdw2001 Posts: 16,999member
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 

    This doesn't even make sense.  A global intimidation scam?  To what end?  Agree or disagree with the actions he's taken, do you concede China is a real problem when it comes to trade, intellectual property, etc?  What would be the endgame of such a "scam?"  
    airnerd
  • Reply 5 of 28
    sdw2001sdw2001 Posts: 16,999member

    lkrupp said:
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    So what’s your solution to China's blatant thievery of technology and intellectual property, and the dumping of Chinese steel and other durable goods at prices no American producer can match? Keep “talking”  to them in hopes they will mend their ways? When someone comes in with the predictable negative response to these tariffs I always ask what solution they recommend other than simply capitulating to China and accepting our new role of a second rate economy controlled by and at the mercy of China.

    So let’s hear your solution. Or is it just because #45 is doing it and that makes it bad?
    I think spice-boy’s post echos a lot of people’s frustration about these tarrifs and whether they have helped or hurt Americans and our economy. 

    Your points are valid about the crimes China has committed, but is #45’s solution helping, or hurting us in the long term?
    It doesn’t help when it appears that #45 does not know how tarrifs work and who will bear the brunt of higher costs. 

    The flip side is that Wall St. acts hysterically whenever the threat of any punitive measure is talked about.



    I think calling it a "scam" is way, way over the top.  Frustration or confusion or outright disagreement?  Let's hear the argument.  I haven't heard a good one yet.  It's all "free trade good.  Tariffs bad."  Why?  

    Regarding the long term, it's obviously too early to tell.  I do know that we've been doing things one way for 40 years, and it's had disastrous results.  I do know that the country running a trade deficit has an easier time in a such "war."   Why do you state Trump doesn't know how tariffs work?  I think he knows exactly how they work...that's why he's using them as leverage.  This is not a partisan comment, but how may times does Trump have to "win" in order for his opponents to stop thinking he's an idiot?  And idiot doesn't do what he's done over the past few years.  An idiot doesn't get elected President over the most traditionally qualified field in history.  An idiot doesn't survive a frame job and coup attempt from his own government (and no matter who you voted for--that's exactly what happened).  

    How all this works out is anyone's guess.  Maybe he's right.  Maybe he's wrong.  But I, for one, am glad to see someone finally standing up for the U.S. on trade.  
    edited May 14 rbelizeairnerdlowken
  • Reply 6 of 28
    If Apple can move production to automated factories in the USA and then can convert that automation tech into home robotic problems then, yes Apple's growth potential is virtually unlimited. The only question is does Apple have the kind of vision in its corporate offices to pull off a coup like that?
  • Reply 7 of 28
    volcanvolcan Posts: 1,782member
    China isn't so much stealing our technology, we gave it to them freely. It is the US's fault just like we gave away our manufacturing with NAFTA. We gave away the internet and the Panama Canal and our most advanced military equipment. Our higher education as well. Hell we even delivered all the parts for the "international" space station. we gave away computers and software too. It has been going on at least since the end of WWII. Whenever the US has something valuable they give it away. No fixing it now. You can't put the toothpaste back in the tube.
  • Reply 8 of 28
    lkrupplkrupp Posts: 6,956member
    lkrupp said:
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    So what’s your solution to China's blatant thievery of technology and intellectual property, and the dumping of Chinese steel and other durable goods at prices no American producer can match? Keep “talking”  to them in hopes they will mend their ways? When someone comes in with the predictable negative response to these tariffs I always ask what solution they recommend other than simply capitulating to China and accepting our new role of a second rate economy controlled by and at the mercy of China.

    So let’s hear your solution. Or is it just because #45 is doing it and that makes it bad?
    I think spice-boy’s post echos a lot of people’s frustration about these tarrifs and whether they have helped or hurt Americans and our economy. 

    Your points are valid about the crimes China has committed, but is #45’s solution helping, or hurting us in the long term?
    It doesn’t help when it appears that #45 does not know how tarrifs work and who will bear the brunt of higher costs. 

    The flip side is that Wall St. acts hysterically whenever the threat of any punitive measure is talked about.


    In any war, military or economic, innocents get hurt. The national media is pounding away at the “tariffs are hurting Americans” narrative. Of course they are but yet that same media offers no alternative but to stop the tariffs. Previous administrations have tried negotiating to no avail. As another commenter posted we have let China get away with stealing our technology, stealing our IP, and stealing our markets through predatory pricing. Nothing has yet stopped the Chinese from doing what they damn well please in their assault on the U.S. economy. When you buy an electric drill from Northern Tools or Harbor Freight at half the price of a DeWalt or Craftsman or Milwaukee or Hilti you’re buying stolen technology. The same factory that’s assembling those name branded tools are shipping inferior knockoffs out the back door just like they do iPhone knockoffs. And some here celebrate that thievery.
    edited May 14 kudu
  • Reply 9 of 28
    airnerdairnerd Posts: 653member
    lkrupp said:
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    So what’s your solution to China's blatant thievery of technology and intellectual property, and the dumping of Chinese steel and other durable goods at prices no American producer can match? Keep “talking”  to them in hopes they will mend their ways? When someone comes in with the predictable negative response to these tariffs I always ask what solution they recommend other than simply capitulating to China and accepting our new role of a second rate economy controlled by and at the mercy of China.

    So let’s hear your solution. Or is it just because #45 is doing it and that makes it bad?
    I think spice-boy’s post echos a lot of people’s frustration about these tarrifs and whether they have helped or hurt Americans and our economy. 

    Your points are valid about the crimes China has committed, but is #45’s solution helping, or hurting us in the long term?
    It doesn’t help when it appears that #45 does not know how tarrifs work and who will bear the brunt of higher costs. 

    The flip side is that Wall St. acts hysterically whenever the threat of any punitive measure is talked about.


    The people that bear the brunt of the higher costs are only those buying chinese products.  If you buy American, you don't pay the tariff.
  • Reply 10 of 28
    LordeHawkLordeHawk Posts: 130member
    Trump should have worked with Europe to force China into submission, instead of going after everyone.  Europe is having the same problems with China and our combined pressure might have been enough.  He could have handled Europe later, Brexit has proven they’re not going anywhere.

    If China will not play fair and respect the US economy, then we cannot show China respect.  
    The practice of not formally recognizing Taiwan as a sovereign nation is a form of respect.  I can think of many ways to make China do the right thing....


    jakespeedkudu
  • Reply 11 of 28
    volcanvolcan Posts: 1,782member
    airnerd said:

    The people that bear the brunt of the higher costs are only those buying chinese products.  If you buy American, you don't pay the tariff.
    Every product that has some electronics in it probably has Chinese components including our military aircraft. It is not a good thing for our country's defense to depend on China. It is virtually impossible to buy American. Especially difficult to find 100% made in USA because the FTC allows the label Made in USA even when the product uses only 75% of materials made in the USA. 

    Check this page for the products that are 100% American made. There are only four electronics products, couple of headphones and some speakers.

    https://clark.com/shopping-retail/american-made-in-the-usa/
  • Reply 12 of 28
    nealc5nealc5 Posts: 14member
    American's caused some of the China (and before that Japan, then South Korea, and now Vietnam and India) problems by relentlessly pursuing lower cost raw materials and labor. We flock to Ikea and Wal-Mart to buy the cheapest items, most made in China).  We did that with Japanese televisions that killed the American TV industry (remember Zenith?), and now Korean Samsung and LG are the leaders, but Vizio, TCI and other Chinese manufacturers are taking over).  When was the last time you bought a Maytag or a GE refrigerator or washing machine??  Japanese and Korean cars have all but killed American sedans made here.

    Apple used to manufacture computers in the US.  So did Dell.  But Americans want cheaper and cheaper, and it's cheaper to make stuff in Asia.

    Now don't get me wrong, the Chinese steal intellectual property and don't play fair. And I absolutely detest Trump. I agree something needs to be done about China, but hurting the economy with impulsive tweets isn't perhaps the right way.

    Eventually, like Japan, even China won't be cheap, and the world will move to other lower labor cost places (maybe India or Africa).  Or robotics will allow the US industry to survive (although jobs won't).

    Neal

  • Reply 13 of 28
    spice-boyspice-boy Posts: 795member
    #45 only knows how to work a scam, a grifter on the highest level. This is a ploy to get his most devout followers to re-elect him next year.

    Have any of you asked how did China get in the position it is today? Every big manufacturer picked stakes and headed to a nation with no labor unions, massive workforce and one that is better educated and trained in advanced manufacturing, to a country with no environmental protections in place, all this to help the bottom line which everyone in the west including corporations and consumers have benefited from. 

    The old "they stole our jobs" and "they stole our technology" is a smoke screen to hide why and where and why manufacturing "went away". Apple will never make iPhones or any other product of any quantity in the USA again, why should they when they have made billions in profits from their friends in China. 

    Tariffs are soooo 19th century. 
    edited May 14 kruegdudefastasleep
  • Reply 14 of 28
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    That’s actually one of my problems with tariffs and government regulations in general. They allow companies in favorable political positions to get benefits at the expense at other businesses. Undermines free competition.
  • Reply 15 of 28
    kruegdudekruegdude Posts: 334member
    sdw2001 said:

    lkrupp said:
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    So what’s your solution to China's blatant thievery of technology and intellectual property, and the dumping of Chinese steel and other durable goods at prices no American producer can match? Keep “talking”  to them in hopes they will mend their ways? When someone comes in with the predictable negative response to these tariffs I always ask what solution they recommend other than simply capitulating to China and accepting our new role of a second rate economy controlled by and at the mercy of China.

    So let’s hear your solution. Or is it just because #45 is doing it and that makes it bad?
    I think spice-boy’s post echos a lot of people’s frustration about these tarrifs and whether they have helped or hurt Americans and our economy. 

    Your points are valid about the crimes China has committed, but is #45’s solution helping, or hurting us in the long term?
    It doesn’t help when it appears that #45 does not know how tarrifs work and who will bear the brunt of higher costs. 

    The flip side is that Wall St. acts hysterically whenever the threat of any punitive measure is talked about.



    I think calling it a "scam" is way, way over the top.  Frustration or confusion or outright disagreement?  Let's hear the argument.  I haven't heard a good one yet.  It's all "free trade good.  Tariffs bad."  Why?  

    Regarding the long term, it's obviously too early to tell.  I do know that we've been doing things one way for 40 years, and it's had disastrous results.  I do know that the country running a trade deficit has an easier time in a such "war."   Why do you state Trump doesn't know how tariffs work?  I think he knows exactly how they work...that's why he's using them as leverage.  This is not a partisan comment, but how may times does Trump have to "win" in order for his opponents to stop thinking he's an idiot?  And idiot doesn't do what he's done over the past few years.  An idiot doesn't get elected President over the most traditionally qualified field in history.  An idiot doesn't survive a frame job and coup attempt from his own government (and no matter who you voted for--that's exactly what happened).  

    How all this works out is anyone's guess.  Maybe he's right.  Maybe he's wrong.  But I, for one, am glad to see someone finally standing up for the U.S. on trade.  
    Use this search

    krugman on tariffs

    in google and read. 
  • Reply 16 of 28
    apple ][apple ][ Posts: 8,580member
    kruegdude said:

    krugman on tariffs

    in google and read. 
    Sorry, Krugman is a moron who predicted that the markets would crash and the entire world would plunge into a huge recession with no end is sight when the God Emperor got elected.

    I don't pay attention to the mentally deranged and the cluelessly wrong.

    https://www.politico.com/story/2016/11/krugman-trump-global-recession-2016-231055


    edited May 14
  • Reply 17 of 28
    lkrupp said:
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 
    So what’s your solution to China's blatant thievery of technology and intellectual property, and the dumping of Chinese steel and other durable goods at prices no American producer can match? Keep “talking”  to them in hopes they will mend their ways? When someone comes in with the predictable negative response to these tariffs I always ask what solution they recommend other than simply capitulating to China and accepting our new role of a second rate economy controlled by and at the mercy of China.

    So let’s hear your solution. Or is it just because #45 is doing it and that makes it bad?
    solved long ago. this thing called TPP was a multinational approach to going after China. US screwed it up
  • Reply 18 of 28
    If Apple can move production to automated factories in the USA and then can convert that automation tech into home robotic problems then, yes Apple's growth potential is virtually unlimited. The only question is does Apple have the kind of vision in its corporate offices to pull off a coup like that?
    but then they are walking away from selling phones in China. You know there are not enough Americans to make iPhones for Americans right?
  • Reply 19 of 28
    LordeHawk said:
    Trump should have worked with Europe to force China into submission, instead of going after everyone.  Europe is having the same problems with China and our combined pressure might have been enough.  He could have handled Europe later, Brexit has proven they’re not going anywhere.

    If China will not play fair and respect the US economy, then we cannot show China respect.  
    The practice of not formally recognizing Taiwan as a sovereign nation is a form of respect.  I can think of many ways to make China do the right thing....


    exactly, it was called TPP
  • Reply 20 of 28
    sdw2001 said:
    spice-boy said:
    So glad Apple will not be directly affected by #45's global intimidation scam, however the global economy may not agree with your assessment. This will impact many more companies, countries and economies than just China. 

    This doesn't even make sense.  A global intimidation scam?  To what end?  Agree or disagree with the actions he's taken, do you concede China is a real problem when it comes to trade, intellectual property, etc?  What would be the endgame of such a "scam?"  
    The world had leverage against China and Trump walked away from that deal. He will likely walk away from any deal here too. He doesn't have the time or patience to win. And he has no track record of winning. China does!
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