EnSmartphone and computer manufacturer Apple has cut its revenue guidance for the most recent fiscal quarter by between 5.6% and 9.6% to $84 billion. The firm’s CEO, Tim Cook, has cited the “magnitude of the economic deceleration” in China which has been caused – again in part – by “rising trade tensions with the United States” as a major driver for the slowdown.
That there has been a trade dispute-inspired slowdown in China’s trade activity is hardly new news. Official data – first discussed in Panjiva research of Dec. 10 – show’s China’s bilateral trade with the U.S. grew by just 1.0% in November compared to 10.3% in the prior three months. That included a drop in export growth to 9.8% from 13.5% in the prior three months while imports suffered a more extreme 25.0% drop from zero growth previlous.
The latter has largely been the result of reduced commodity imports from China. A recovery is possible given recent government actions to cut import duties broadly and improve commodity purchases from the U.S.
Source: Panjiva
In the meantime Chinese exports of mobile phones – including those shipped by Apple’s suppliers – fell 8.2% on a year earlier in the three months to Nov. 30. That was offset in dollar terms though by a marked increase in average values per handset so that value of exports actually climbed by 20.8% over the same period. The smartphone industry’s continued success therefore likely needs further growth in average handset values to offset declining shipments.
Source: Panjiva
