Tim Cook: Apple Saw 'Great Improvement' in China in Q3 2019

[macfacts]

iPhones are manufactured in China, as there are no tariffs (I don’t believe) as it ships from China to its local stores or direct from factory, I am surprised Apple does not sell these cheaper as there is no shipping by sea or air to contribute to the overhead.

You are surprised apple is not passing on the savings to the customer? That was a good laugh I just had.

 

[Cosmosent]

● 55.0M + 36.7M + 33.9M + 35.0M = 160.6M units (FY19)

● FY18-FY19 iPhone Unit Sales Decline: 26.2%

● FY18-FY19 iPhone Revenue Decline: 15.8%

 

[tongxinshe]

iPhones are manufactured in China, as there are no tariffs (I don’t believe) as it ships from China to its local stores or direct from factory, I am surprised Apple does not sell these cheaper as there is no shipping by sea or air to contribute to the overhead.

Apple products do subject to tariffs in China even if they are actually produced in China, as Apple is a US company and the profit eventually belongs to the US. Comparing with tariffs, shipping fees are totally ignorable when we are talking about these kind of high-value products.
[doublepost=1564599704][/doublepost]

But he says ‘return to growth’?

if you count everything in, Mac, iPad, wearables, accessaries, services.
[doublepost=1564599851][/doublepost]

You have to know how to interpret C-Suite speak. iPhone sales were down 20% in China last quarter. They are only down 4% this quarter. -20% to -4% is a 16 point increase, thus a return to growth. He's technically right. The language is ambiguous enough for the layman to infer that he means "return to growth" as in a return to positive numbers, not smaller negative numbers.

Totally wrong interpretation, you.

 

[69Mustang]

Totally wrong interpretation, you.

Your interpretation would be... what?

 

[tongxinshe]

Your interpretation would be... what?

I already stated the correct fact, in the same comment, right before the sentence you pick-quoted.

 

[code-m]

Apple products do subject to tariffs in China even if they are actually produced in China, as Apple is a US company and the profit eventually belongs to the US. Comparing with tariffs, shipping fees are totally ignorable when we are talking about these kind of high-value products.

Correct me if I am mistaken, the factories belong to a Chinese company and the contract is with an American company, the taxes are sent offshore to another country (i.e. Ireland -> Netherlands -> Jersey Islands) to pay little or no taxes through a loophole. As Apple has to charge local taxes in the country it operates in since the device is sold there, why would they have to pay USA taxes. Maybe China is providing a tax incentive, I am not sure anything is possible.

Amazon operates in USA and pays little to no taxes annually, not sure about China possibly something similar.
[doublepost=1564608529][/doublepost]

You are surprised apple is not passing on the savings to the customer? That was a good laugh I just had.

No not surprised, I believe you misunderstood what I was saying. Let me clear things up, as Apple has stated the Chinese market is very important for its business and the Yuan has been artificially devalued (like other global currencies) compared to the US dollar, I a sure since there is no additional cost and the market is important to them some compromises can be made. It is not like these devices are being built in India and being sold in China that there is additional shipping costs.

Considering Apple had iPhone XR promotions in China that seem to have worked out for them.

 

[code-m]

When I bought the new mac mini here in Shanghai it was delivered with an import sticker/notice on the box, even though it was made in (and I was tracking it from) Shenzen.

I actually think there're somehow considered imported goods here, no idea how the taxation works though.

It makes no sense if in your situation the new MacMini is built in China and being shipped within China, how is this considered an import. Are Chinese based factories working inside a US Embassy, Apple does not even own the factory it is just a client. I wonder if Apple had a shell company that was registered in China who placed ordered with Chinese factories will it be charged "import" taxes.

 

[tongxinshe]

Correct me if I am mistaken, the factories belong to a Chinese company and the contract is with an American company, the taxes are sent offshore to another country (i.e. Ireland -> Netherlands -> Jersey Islands) to pay little or no taxes through a loophole. As Apple has to charge local taxes in the country it operates in since the device is sold there, why would they have to pay USA taxes. Maybe China is providing a tax incentive, I am not sure anything is possible.

Apple products are subjected to tariffs when they are sold in China, since the seller and the profit-taker, Apple, is a foreign company -- United States.
Apple products are subjected to the new tariffs Trump added, because this new tariff is not based on who is the profit taker, but based on who lastly assembled the product.

 

[iZac]

It makes no sense if in your situation the new MacMini is built in China and being shipped within China, how is this considered an import. Are Chinese based factories working inside a US Embassy, Apple does not even own the factory it is just a client. I wonder if Apple had a shell company that was registered in China who placed ordered with Chinese factories will it be charged "import" taxes.

All I can think is when it's being flown from Shenzen to Shanghai it briefly 'leaves' China in some airport facility. Or maybe because the product is being made on behalf of a foreign rather than domestic Chinese company, the product itself is taxable as foreign goods. I was rather confused.

Having said that, Apple will have to have a locally registered company to trade in China, but to be honest the complexities and bureaucracy of foreign companies trading in China is beyond my understanding.

 

[saudade]

Only if you sell it before the next recession.

on next recession i gonna buy more

 

[skys15]

We get Chinese exchange students every year and they’ve all come from China with their iPhones and Macs, surprisingly.