Will Apple's roots in China hold fast amid political storm?

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AFP San Francisco
Last Updated : May 30 2019 | 9:30 AM IST

Apple is seen as a prime target for retaliation over US moves against the Chinese tech giant Huawei, but the roots planted by the company in China should help it weather the storm, analysts say.

While Beijing may take aim at Apple in the countries' high-stakes trade war, experts believe that the company's size, cachet, and years spent cultivating business relationships in China should protect it from any direct retaliation.

"As the US pounds on Huawei, Apple is the likely target for China to pound back," technology analyst Rob Enderle of Enderle Group said.

"As the trade war accelerates, then Apple and Huawei are the two firms likely to get the damage," he said.

Huawei has been thrust to the center of escalating tensions between the world's two top economies, which have exchanged tariffs on hundreds of billions of dollars in two-way trade.

President Donald Trump's administration has infuriated Beijing by blacklisting the smartphone and telecommunications company over worries that China uses it as a tool for espionage and allegations of breaking Iran-related sanctions -- charges the company has denied.

Trump has said that Huawei's fate could be included in any deal to resolve their trade war, but such a deal has proved elusive, and in the interim, tensions remain high.

The company is considered a "national treasure" in China, and Apple has similar status in the US, said Enderle.

"It is always difficult dealing with companies considered national treasures," he said.

"There is certainly a risk of this escalating beyond reason." - Points in Apple's favor -
Increasing costs or crimping production for Apple directly in

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First Published: May 30 2019 | 9:30 AM IST

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