Analysts: victory trump at the election of the President of the United States will result in big problems for Apple
During the first presidential debate, held last Monday, Republican candidate Donald trump has criticized Ford Motor Company for what she invests in Mexico and is going to make cars South of the border. But Ford isn’t the only American company who the wrath of trump. As noted, Investing, Apple, the company with the largest market capitalization in the world are regularly mentioned on the front pages along with trump. This amazing couple is not very good finds a common language for a number of reasons. From the beginning, trump and Apple (in the person of General Director Tim cook) has repeatedly exchanged blows.
The first blow trump struck in January, criticizing Apple for its decision to produce products outside of the United States. In February, he even called for a boycott of the company after she refused to unlock the iPhone belonging to one of the shooters that killed 14 people and injured 22 during the attack in San Bernardino. In March for criticizing Apple trump chose the subject of visas H-1B — legal but increasingly unpopular instrument that technological (and other) companies use to employ workers from outside the United States, presumably with specialized skills.
Apple responded in June by refusing to support the Republican national Convention and calling the reason for this decision the views of trump. Tim cook added fuel to the fire and insulted trump’s more, when the summer had organized several events to raise money for the speaker of the house of representatives Republican Paul Ryan and presidential candidate from the Democratic party Hillary Clinton – two opponents trump.
The conflict began with a stiff trump statements about trade and production. The presidential candidate of the Republicans said that the U.S. is at a disadvantage compared with China, which, he said, engaged in “financial blackmail” by using currency manipulation.
In contrast to Western economies which rely on free pricing, China through the Central Bank sets the exchange rate of its currency, devaluing the yuan increasing, according to some analysts, pace. This economic policy initiated by the government aimed at ensuring the competitiveness of Chinese exports. At the moment the value of the Chinese yuan holds near its lowest in five years.
Trump believes that the devaluation has weakened the U.S. manufacturing sector, causing a loss of tens of millions of American jobs.” Apple, in particular, produces its iPhone in China at the facilities of Foxconn and It’s obviously a sore spot for trump and a reason for clashes between him and Apple.
Speaking January 18 at the liberty University in Lynchburg, Virginia, trump mentioned most profitable company in the world, saying: “We’ll force Apple to raise their damn computers and devices in this country, not in other countries.”
Just look at wages in manufacturing, to understand that this could be a huge problem for Apple. The average annual salary of a factory worker in China is 55 325 yuan ($8 281). For comparison with a 40-hour work week the average employee in manufacturing in the US gets $42 000 per year, slightly more than five times more than Apple now pays its Chinese workers on outsource basis.
Although it is not clear how many employees Foxconn or Pegatron to produce the iPhone, you should think about it: given that Apple last year sold more than 230 million device, and the closed Motorola plant in Fort worth, Texas, about 2 000 workers were producing approximately 5 million smartphones per year, it is logical to assume that on the creation of Apple products there are about 100 000 Chinese workers. One of the reasons for the closure of the Motorola factory in the US in 2014 was high cost.
If you use this figure, the potential costs Apple to move production in the U.S. will be too high and probably unacceptable. If trump did impose a ban on offshore production or will establish additional charges to your iPhone is made in China, the negative effects will also be huge.
Remarkably, in conversation with Barack Obama in 2011, the late Steve jobs said clearly and unambiguously: “[Manufacturing] jobs will not return [to US], because China is now the most advanced manufacturing infrastructure in the world.”
Just a month after trump statements about the proceedings initiated by the trump, the conflict took a new turn. In February, Apple and its CEO Tim cook refused to comply with the court’s decision and unlock your iPhone belonging to one of the perpetrators of the attack in San Bernardino, saying it would jeopardize the security of all iPhone users. Many Americans, including trump, considered this refusal unpatriotic.
At a meeting with voters in South Carolina trump called for a boycott of Apple products. Later in an interview with Bloomberg, he said: “I’d finished with him [cook] so tough — you don’t realize is that his head fell into place only after returning to Silicon valley.”
The presidential candidate from the Republican party has exacerbated the conflict with Apple in March when he voiced his views on immigration reform and, in particular, the H-1B visa that allows us companies to hire foreign professionals if people with such skills are difficult to find in the US labor market. In fiscal 2014, according to the citizenship and immigration of the United States, more than 313 000 foreign workers took advantage of the visas H-1B, and 64% of them did computer related work.”
Although tech companies urge the government to expand the program, ordinary citizens increasingly oppose the involvement of foreign workers, who allegedly replaced American workers for less money. Trump actively used this idea, stating that he will end the program if elected. “I know very well the H-1B… Such visas should not be. This is a very, very bad for workers”.
He later softened his stance, saying that the country needs to continue to attract skilled workers, but still need to “pause” in issuing visas H-1B and thus to increase the salaries of workers, making them to minimize profits of enterprises from their involvement. By submitting 2013-2015 4 020 applications for H-1B visa, Apple occupies the 20th place among the corporate sponsors of the issuance of visas, the trailing number from other technology giants like Intel, Amazon and IBM.
Apple first responded to the persecution launched by trump at the Republican Convention in July. Previously, the company sponsored conventions of Republicans and Democrats in equal measure, but this year she decided that she will not grant to Congress of the Republican party nor the financial and technical support. According to Politico, the decision was made in response to trump’s remarks about women, immigrants and minorities, though, given the constant attacks of the candidate in the direction of Apple, the company could be other reasons.
In recent months, cook also held two events to raise funds for opponents of trump. At the end of June he organized a private Breakfast with Apple Treasurer Gary Wipfler to raise funds for Paul Ryan and other Republicans in the House of representative and at the end of August, he held an event to raise funds for Hillary Clinton along with Lisa Jackson, one of the senior leaders of Apple.
In General, the technology industry supports Clinton: companies and senior executives from Silicon valley donated about $4 million, and the Trump — less than $200 000. According to media reports, Google gave Hillary $600,000 and Apple is one of the ten largest campaign contributors of the democratic candidate.
Storm in a teacup threat or revenge?
Some believe that the presidency, trump will be beneficial for Apple because it advocates reducing corporate taxes to encourage companies to return to the United States. Apple, which holds more than $200 billion of cash in Ireland to benefit from lower Irish corporate tax is one of the largest users of the tax loopholes in the world.
However, the existence of a conflict between Donald trump and Apple obviously. If you follow the money, revealed one more important detail. According to Fortune magazine, the biggest asset of the trump in the stock market are shares… Apple. Its share in the company valued at $1.25 million
At first glance, it can calm nervous Apple investors. Why Trump to harm yourself? But, according to the same report, Fortune, in July 2015 Trump owned a stake in Apple’s $6.5 million Given that Apple shares have since fallen in price by about 10%, it still means that last year’s trump actively got rid of securities of the “Apple” brand.