Tariffs, Audits and Headphones

Apple is in an uneasy position as US-China trade war drums keep banging

United States is considering "Broad Curbs on Chinese Imports and Takeovers". If the US goes forward with Section 301 of their 1974 Trade Act, China could apply tariffs "on potentially hundreds of Chinese products" as retaliation against China’s theft of American IP.

AirPods on track to 25-30 million units sold in 2018 according to Barclays and KGI. Added to sales of 15 million last year would make for 40-50 million AirPods sold in two years.

  • For reference, the iPod at its peak sold 55 million units in 2008.

  • New AirPods 2 are in the way with better Siri support for later this year.

  • Also a new high-end over-ear headphones with noise-cancelling tech that could "potentially cannibalize some Beats sales"

Apple finds more serious supplier problems as its audits expand. The company found "a higher number of serious violations of its labor and environmental policies for suppliers". Suppliers compliance with 60-hour week max fell 4pp to 94% from one year prior.

  • Apple is tracking the working hours of 1.3 million workers (30% more than in 2016) in 756 different suppliers.

  • Apple canceled 16 contracts with smelters and refiners last year because "they would not participate in a third-party audit of their practices".

One More Thing

  • Adobe Digital Insights: Smartphone Visits Are Becoming More Valuable. "The biggest growth is coming from India, where the smartphone population increased by 211 million since January 2015".

  • Why Apple Should Buy Aston Martin "almost the only luxury carmaker that's truly independent". Jony Ive is a "huge Aston Martin fan".

  • Samsung may be cancelling in-display fingerprint sensor for the upcoming Galaxy Note 9 due in August. It seems Apple and Samsung could share suppliers of this tech so this could be a hint for the next iPhone,

  • Europe points finger at Ireland over tax avoidance. "Clearly more needs to be done." said Pierre Moscovici, EU tax commissioner.

  • Apple updates its Made-for-iPhone (MFi) branding for accessory makers. "iPod" is still in it but the new design drops the silhouettes.

  • Apple needs an Identity Management Solution to take over schools. Microsoft and Google are way far ahead of Apple on this with better services tailored specially to schools administrations, teachers, students and parents.