back to another edition of Tech Talk I'm Ken MingIs executive editor
Computerworld I'm here with Juliet Beauchamp to talk about technology and
tariffs we're live-streaming on LinkedIn and YouTube so if you've got a question
a comment for us leave it in the comments below we'll try to get to it
while we're on the air as always remember and be nice we don't want a
food fight here so Juliet it seems like the the big news around technologies
these days technology in general is dealing with these tariffs and the
terrified that's going on yeah and I mean just recently because there's been
different sort of amounts of tariffs levied in the past by the Trump
administration on imports from China but just recently there's a threat to tariff
300 billion with a be you know dollars of goods imported from China at ten
percent and a lot of that includes tech products and this is you know you may
recall there is a trade war going on between the US and China and I've been
actually covering a lot of it over on tech feed and in relation to Huawei
which was a huge yeah that's been a big story tank they make everything in China
phones laptops and what I have really been covering is 5g infrastructure and
this new tariff could really affect a lot of tech imports and it's gonna make
it really expensive for a lot of these phones especially that are produced in
China to be shipped into the u.s. yeah it's surprising because the the latest
one that was announced on Friday the one you're talking about is an extra 10
percent on 300 billion dollars worth of goods I know that Apple had already gone
to the administration the Trump administration had had sought a waiver
which I don't believe Apple has gotten and there's been a lot of discussion at
least over the weekend and into this week that Apple could really be hit hard
because of obviously all the manufacturing it does in China you've
got the new iPhone will be announced next month maybe other devices this fall
a new Apple watch some more hardware from Apple and Apple is you know right
now I'm gonna have to figure out if this tariff is actually imposed it hasn't
been imposed yet yeah it wouldn't go into effect until September the first if
it's gonna happen and you know these things there's a lot of bluster here so
we'll see in fact even today the market is sort of stabilized but
you know Apple is really sort of hanging out there is the one company that might
really be immediately hit with products I mean and it's of course its products
are already expensive to begin with and not only that it's really I mean Apple
has seen as of late of decrease in iPhone sales so act it's already hurting
a little bit and I've read a lot of reports about this and insights from
analysts and there's I found actually quite a difference in opinion some
saying Apple will be fine it'll recover no big deal I have faith in Apple that
well I don't think apples doing I think we'll have new iPhones this fall
regardless of cost but it's saying you know the iPhone business has already
been hit this could hit it more but on the bright side its service business is
really growing and you don't need to manufacture Apple music correct exactly
it's interesting I've also seen one of the discussions that's been out there
the analyst Ming Chi Kuo who was very very focused on Apple supply chain and
where it's manufacturing has talked about the idea that Apple may eventually
need to sort of diversify where its manufacturing is taking place in
particular moving some of it to Vietnam and even to India which I was sort of
surprised that those are the places that I guess you know the workforce is there
the costs are low enough I don't expect Apple to be moving
manufacturing back to the US because cause here obviously you're gonna be
much higher and if you think that $999 phone is expensive now if it were
manufactured in the US it would be a lot more and what I think is also important
to note is that because this is just obviously a tax on imports to the United
States these aren't the Apple doesn't need to move all of its manufacturing
out of China it just needs to move enough to serve the US consumers and
that is also I think something interesting to think about just because
apples the US company doesn't mean it's now it has to pull out of China it's a
global company it's not gonna pull out a China yeah I mean no obviously not and
this is true for other companies too it's interesting I did see some
discussion I think there was a Forbes story this week that noted that Samsung
is more diversified Samsung is sometimes seen as a rival for for Apple when it
comes to hardware in particular phones but what's interesting is that you know
obviously Apple has a ton of money in the bank and if they wanted to
absorb the you know the extra cost from these tariffs it could certainly rollout
products this year without any you know hikes price hikes and take a little bit
of a hit on the bottom line I don't think it would do that indefinitely you
know if these tariffs are imposed and they be you know continuing to next year
you might start to see some price increases that Apple could specifically
say this is because of the tariffs we have to raise the prices yeah I think
it'll be interesting to see what Apple's move is because of course it can afford
to take on these hikes and to the consumer I think I was reading an
article it makes a $999 iPhone a thousand $29 so yeah about I'd pay the
extra 30 bucks I would if I want my iPhone this fall I'll pay the $30 but
again you know it's sometimes it feels like I'm already paying almost a
thousand dollars for iPhone now you really have to push me over the edge but
I think it'll be interesting to see what their move is and whether that taking on
all of the tariffs to the cost of the tariffs rather than pushing them on to
consumers earns them quite a bit of good faith because they're holding the line
on prices yeah and I've actually seen stories from actually over at PC world
they had a story about PC laptop manufacturers sort of warning consumers
hey if you're in the market for a new laptop or a new notebook you might see
an increased price this fall yeah it's also I wonder too if some of the
manufacturers especially the big ones might actually turn this around and say
buy now and get ahead of the tariff you know it's back to school it's back to
school and if you want to overweight those tariffs you get at you have to act
quickly it is surprising though you don't really think about something like
this you know when you're thinking of economics and the global economy and
something is boring and dry as tariffs yeah it's something that can affect the
IT industry and I mean obviously it would affect the entire economy there
are there's there's discussion that this could be a drag on the US economy in
general and would also hurt the Chinese economy as well but you know you do have
certain companies again going back to Apple that have really spent a lot of
time and energy and money investing in China and investing in the supply chain
and manufacturing there so right now they're the ones that are
most likely to be on the leading edge of companies that get hit if this really
takes place yeah it's definitely not going to be just an apple problem it's
gonna be an every not every probably the large majority of tech problem tech
company problems that's important that are importing heavily to the US but on
top of that I mean it's a it could turn into a consumer problem whether you're
an individual consumer or you're buying you know new MacBooks for your entire
company everyone needs an upgrade well exactly you know and this would this in
there there are a lot of Apple devices and hardware you know phones and MacBook
Pros etc that companies are now buying it's not just the consumer play that it
used to be this is the sort of thing that you know I'm sure a lot of CFOs are
keeping an eye on this if they're looking at next year's budget in terms
of what they're going to be spending on hardware and trying to figure out
whether their hardware you know it's gonna be more expensive and that's gonna
hit other corporate bottom lines is this sort of the spillover effect that starts
in China works its way through Apple and other companies and then winds up
hitting companies here in the US oh absolutely and I think I mean
obviously we won't even know for sure if these are going to roll out on September
1 it's really it really kind of it could be anyone's guess but um even though
some analysts are saying apples gonna absorb the cost that doesn't mean that
their stock prices are just ain't unaffected yeah it actually did take a
hit on Friday and again yesterday I haven't looked at the stock market today
to see how apples prices are doing now again apples not going away but this is
one more thing that the company doesn't need right now at a time when when
iPhone sales have been soft because a lot of the markets that it's been in its
you know largely penetrated and so the markets it's trying to get into now are
likely to be more price sensitive so that's gonna you know it could very
easily hit them over the next three two or three quarters and it could perhaps
even discourage people you know if they're in someone's in the market for a
smartphone yeah they're not going to buy iPhone and then they're gonna buy maybe
something lower end you look at some of the lower and lower end androids it
it's upsetting for Apple even though those are also present price well they
will be exactly apples not alone that pretty much covers sort of what I you
know what I wanted to get out there and let people know what's going on any
other thoughts that you've got before we I don't think so I think it'll be
interesting to see how how the smartphone market takes a hit I think a
smartphone especially just because there are such a you know people are getting
them every year I was looking I'm planning on it we'll
see again I don't think the $30 make a difference but we'll see what happens
but so you know our point being when you see all this talk about tariffs and
trade wars and President Trump and what he's saying and what China's doing it
actually does affect the IT industry and you know we'll see how it turns out
again after September the first one to come back and revisit this yeah maybe
for the iPhone 11 time are they gonna call the iPhone 11 or like the iPhone X
I the Assumption I don't know I I hope it's iPhone 11 and not iPhone X I
because I always get those confused but I'm assuming iPhone 11 so we'll be sure
to keep everyone in the loop obviously this is only going to develop more from
now until the beginning of September so thank you everyone so much for watching
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