International Business News

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“After Years of Blockbuster Global Sales, Apple’s iPhone Hits a Slump” by Laura Sydell

https://www.npr.org/2019/01/15/685414032/after-years-of-blockbuster-global-sales-apples-iphone-hits-a-slump

Last year Apple Inc. had become the first American public company valued at $1 Trillion. However, Apple stock lost significant value after CEO Tim Cook lowered revenue expectations. The major reason for lower expectations is reported to be declining sales in Asia. According to the news, China and Taiwan together account for 20% of Apple’s overall business.

Two main reasons for declining sales in Asia are highlighted. The first reason is that Chinese companies like Huawei manufacture similar phones and sell them at a much lower price. US officials have accused Chinese companies of using commercial spies to steal know how and manufacture high tech products at much lower prices (Wilber, 2018). They have added that this creates unfair competition between the United States and China as well as unfair competitive advantage to Chinese companies.

According to Apple CEO Tim Cook, another reason for the declining sales in China is the trade war between the Trump administration and China. He believes that although many Chinese may prefer the iPhone, they cannot afford it.  Current news has been drawing attention to deteriorating economic conditions in China. This news is a good example of how connected and global the world is. A decline in China or any other markets that U.S. companies do business in will eventually hurt the U.S. economy. We read about the importance of emerging economies and their middle class. The growing middle class in emerging economies constitute a group of people with purchasing power and they run the engine of the economy. When people loose purchasing power around the world, it has a negative effect on all global companies whereas when economies get stronger and middle class grows, there are more people with purchasing power. For more information on International Business News read this: https://en.wikipedia.org/wiki/International_Business_Times

International Business News

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