Apple reported $9.55 billion in revenue from China, along with its third quarter earnings report on Tuesday, making for a 19 percent jump since this time last year. But on a call with investors after Apple's third quarter earnings report, investors expressed concern that a recent round of proposed tariffs could impact Apple's future pricing and market share in China.
Apple CEO Tim Cook reiterated the company's position that tariffs can have "unintended consequences" for consumers and the economy, and are generally not the right approach for modernizing U.S.-China relations, but glossed over what if any impact the new set of tariffs on $200 billion in goods could have on Apple products.
"...The trade relationships and agreements that the U.S. has between the U.S. and other major economies are very complex, and it's clear that several are in need of modernizing, but we think that in the vast majority of situations that tariffs are not the approach to doing that," Cook said on a call with investors.
Cook went on to say the company would evaluate potential consequences of the new tariffs and submit comments for review to the administration.
Whereas smartphones and laptops faced little danger of import tariffs, the latest round of U.S. tariffs on $200 billion in Chinese goods were projected to hit health trackers, including the Apple Watch.
The July rulings named Apple's watch, several Fitbit activity trackers and connected speakers from Sonos, sparking fear those companies may have to consider price hikes. If it goes into effect this fall, Apple could face a 10 percent tariff on some devices.
"There is an inescapable mutuality between the U.S. and China that each country can only prosper if the other does. And, of course, the world needs both the U.S. and China to do well for the world to do well. Like I said, I can't predict the future but I am optimistic the countries get through this and we are hoping that calm heads prevail," Cook said on the call.
Apple's third quarter revenue from China represents a 19 percent jump from the $8 billion the hardware technology company reported this time last year, but a 27 percent drop from the $13.02 billion Apple reported last quarter. In between the second and third quarters of 2017, Apple saw a 25 percent decline in revenue from China.