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Apple’s Terrible Week Is Dominated by China, Tariffs, and Intel

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Don Reisinger
Don Reisinger
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By
Don Reisinger
Don Reisinger
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May 18, 2019, 9:30 AM ET
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In reviewing Apple’s past week, it’s extremely difficult—if not impossible—to find good news.

The week started with China saying that it would impose $60 billion in new tariffs on a variety of goods, including the batteries that Apple uses in its iPhones. That alone could increase Apple’s manufacturing costs and push it to raise its iPhone prices. The same day, the U.S. Supreme Court hit Apple with an unfavorable ruling that consumers and app developers could sue the company for “alleged monopolization” for allowing only one marketplace for iOS apps—its own.

Not surprisingly, Apple’s shares tumbled. But that wasn’t all.

This is Fortune’s latest roundup of the biggest Apple news. Here’s last week’s roundup.

A report this week from researcher Consumer Intelligence Research Partners (CIRP) said Apple’s iPhone market share in the U.S. has plateaued. And after Intel announced a security flaw in its processors that impact Macs, it was clear Apple really, really needed to get to the weekend.

Here’s a rundown of Apple’s biggest headlines this week:

  1. In response to the Trump administration last week announcing $200 billion in new tariffs on Chinese imports, China this week announced $60 billion in tariffs on a variety of products, including the batteries Apple uses in its iPhones. In a note to investors this week, Wedbush analyst Daniel Ives said that the new tariffs, which take effect on June 1, would increase Apple’s iPhone manufacturing cost by up to 3%. If Apple passes that cost to consumers, it could increase its iPhone XS price from $999 to $1,029, according to Ives. The Trump administration is also considering $325 billion in new tariffs on products that could include iPhones imported from China. If that plan is enacted, iPhones would cost an additional $120 to produce, Ives said.
  2. In a 5-4 decision on Monday, the U.S. Supreme Court said that consumers and app developers could sue Apple for “alleged monopolization” related to its App Store policies. Morgan Stanley analyst Katy Huberty said that the Supreme Court’s decision could end in several outcomes. It’s possible, she said, Apple will beat any future lawsuits and not need to change its App Store policies. The company could also lose a lawsuit and fork over monetary damages to make it go away. In a “worst-case scenario,” Apple would be forced to allow third-party app marketplaces in iOS. Apple hasn’t commented on the Supreme Court’s decision.
  3. Apple’s stock price fell 6% on Monday following the one-two punch from China’s tariffs and the Supreme Court’s decision. Its shares rebounded slightly, but they started the week at around $198. They’re now trading at $190.
  4. CIRP this week said in a report that there are now 193 million iPhones being used across the U.S. While that’s up from fewer than 180 million at the same period last year, CIRP cautioned that the figure’s growth is just 2% quarter over quarter and 12% year over year, according to Apple-tracking site 9to5Mac. In 2018, Apple’s growth rate stood at 4% quarter over quarter and 19% year over year. The research said iPhone use in the U.S. “continues to plateau.”
  5. Security researchers this week announced a new Intel processor vulnerability called ZombieLoad. By exploiting flaws in Intel chips, hackers can steal sensitive data and access information from operating system, virtual machines running in the cloud, and more. The issue affects Windows computers running Intel chips, as well as Macs that run Intel chips dating back to 2011. Apple quickly patched the flaw in a macOS update, but also released a support document informing users about the flaw and providing instructions on how to boost Mac performance.
  6. This week, we released the 65th Fortune 500 list. Apple was third in this year’s rankings behind Walmart and Exxon Mobil. Berkshire Hathaway was fourth and Amazon was five.

One more thing…Apple this week celebrated Global Accessibility Awareness Day to highlight how technology can be “most powerful when it empowers everyone.” My Fortune colleague Lisa Marie Segarra listed five iPhone accessibility features that make using the device easier.

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