The Trump Administration is engaged in an intense trade war with China right now, where US is imposing billions of dollars worth of tariff on Chinese goods, across various sectors and industries.
US Govt is also preventing US companies from collaborating with Huawei, crippling the Chinese smartphone and technology company. And there's fear growing that China will reciprocate by doing something similar -- banning iPhone sales from China, which will hurt Apple badly as a US company.
reuters
According to investment bank Goldman Sachs' advisory to investors,?if China banned Apple from selling iPhones in the country due to ongoing trade war between US, it expects Apple's bottom line to drop by 29 percent.
China is an important market for Apple, accounting for roughly 20 percent of all iPhones sold in 2018. And banning Apple out of the country could also end up hurting China in some way.
Almost all iPhone parts and component supply chain is based out of China, and banning iPhone sales could reduce production which would then have an impact on local employment on the assembly line.
Reuters
Already analysts are expecting the US-China trade war to have some impact on this year's iPhone launching in September -- it will be more expensive.
But out of desperation or to flex its muscles, if China did take the unprecedented step of banning Apple and iPhone to send a strong message to US Trump government, Apple will take a huge hit on its business.
All of this scuffle with China may force Apple to accelerate setting up alternate manufacturing plants and supply chain in countries like India.?Shifting the large scale operations to India is in fact a win-win for everyone involved.
Reuters
Apple will have an alternative to China, and they could use the subsidies and?other benefits of manufacturing?in India to help grow their market share here, something they've always struggled with. But this won't happen in the short term, for sure.