Apple dips on tariff concerns and iPhone demand worries in China
Apple shares fell 1.65% as escalating US-China trade tensions raised fears of retaliatory tariffs on iPhone imports, combined with reports of slowing demand in the Chinese smartphone market where Apple faces intense competition from Huawei.
3 Reasons
US-China Tariff Escalation
New tariff proposals targeting consumer electronics imports could add 10-15% cost to iPhones manufactured in China. Apple sources over 90% of its hardware production from Chinese facilities, making it highly exposed to trade policy shifts.
China Market Share Erosion
Counterpoint Research data shows Apple iPhone shipments in China declined 2.1% YoY in Q1 2026 while Huawei gained 5.3% share with its Mate 70 series. The premium smartphone segment in China is increasingly competitive.
Services Revenue Growth Slowing
App Store revenue growth decelerated to 11% YoY in the latest quarter, down from 16% a year ago. Regulatory pressure in the EU (Digital Markets Act) forcing third-party payment options is expected to compress App Store margins by 2-3%.