Apple iPhone Assembly in India will not depreciate China Claw: Moffett

The leading analyst Craig Moffett suggests that all plans to transfer American iPhone assembly to India are unreal.

Moffett, repeatedly rated as the best analyst by an institutional investor, sent a note to clients on Friday after submitting the Financial Times Apple By the end of next year, he intended to move production towards India from China.

He asks how traffic can reduce the costs associated with tariffs, because the iPhone components will continue to be made in China.

“You have a huge menu of problems created by tariffs, and moving to India will not solve all problems. Now it helps to some extent,” said Moffettnathanson partner and senior managing director of CNBC, “Fast money“On Friday.” I would ask how it works. “

Moffett claims that India’s diversification is not so easy – informing customers of the Apple supply chain would still be anchored in China and would probably happen to resistance.

“The most important is the global trade war is a battle for two front, affecting costs and sales. The meeting of transfer to India can (and we emphasize that it can) help in the first. The latter can ultimately be a bigger problem,” he wrote to clients.

Moffett lowered the target price of Apple on Monday to USD 141 from USD 184 per share. This means a 33% decrease from the Friday closure. According to Factet, the target price is also a low street.

“I don’t consider myself the biggest apple bear,” he said. “I think quite high Apple. My fear of Apple was a valuation more than a company.”

From January 7, Moffett has an evaluation of “sales” on Apple. Since then, the company’s shares have fallen by about 14%.

“None of this happens because Apple is a bad company. They still have a great balance [and] Great consumer franchise – he said. “It is only a reality that has no good answers when you are a production company and your products will be significantly cellad, and you go to the market, which can at least have a slowdown in consumer demand due to macro economy.”

Moffett notes that Apple also does not receive help from its carriers to alleviate the blow of the duty.

“You also have the destruction of demand that is created by potentially higher prices. Remember you had At & tIN Verizon AND T. Mobile It comes out all this week and say that we are not going to guarantee the additional cost of the tariff [on] Phones – he added. “The consumer will have to pay for it. So you will have some destruction of demand that will appear in even longer periods of maintenance and slower [in] Consensus next year. “

According to Moffett, Luz from Apple in China over the US tariffs will also harm the sale of the iPhone.

“This is a very real problem,” said Moffett. “The volume really goes to Huaweis and Vivos and local competitors in China, not Apple.”

Stock Apple comes out the winning week – by over 6%. He speaks a quarterly report from the iPhone’s earnings, the next Thursday after closing the market.