Apple Market Cap Drops $635 Billion

By Douglas A. McIntyre Published Apr 8, 9:15AM EDT

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Apple Inc. (NASDAQ: AAPL) stock has fallen this month, reducing the company’s market cap by $635 billion.
The primary reason for this is tariffs on Chinese imports.

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Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) stock price was $202 on April 2. It has dropped to $180 since then, reducing the company’s market cap by $635 billion. It remains the world’s most valuable company, with a market cap of $2.72 trillion, just ahead of Microsoft’s $2.60 trillion.

The primary reason for the decline in Apple’s share price is that so many of its components and completed products come from China. Tariffs on Chinese imports are currently at 34%, and President Trump has threatened to increase them by another 50%.

Apple cannot quickly lower the effect of China’s tariffs. It makes about 90% of its iPhones there. Rosenblatt Securities recently forecast that the cost of making an iPhone could rise by 43%. The price of an iPhone sold in the United States would increase to $2,300. That would lower demand in the United States, and probably sharply. China is also the primary source of finished Macs and iPads.

Chinese tariffs would create carnage that would deeply wound Apple’s financials. In the most recent quarter, Apple’s revenue was $124 billion, of which $69.1 billion came from iPhone sales. Apple has hoped it would turn itself into a software and services company. However, in the most recent quarter, “Services” revenue was only $26.3 billion.

iPhone 16 sales are already lackluster. They are particularly challenged in China, the world’s largest smartphone market, with 1 billion smartphone owners. In the United States, that figure is closer to 200 million. Apple faces competition from several local manufacturers in China. Apple has also been slow to market with its new AI features and has said they will not be launched until 2026.

One answer to the Chinese tariffs is to manufacture more iPhones in India. The tariff on imports from India is 26%. However, Bank of America analyst Wamsi Mohan believes that Indian production is insufficient to replace China. TechCrunch, “He said that if Apple decided to import all 25 million iPhones to the U.S., it would satisfy about 50% of the demand in the U.S. market.”

Unless the trade war between China and the United States ends, or there is a low-tariff solution, Apple’s bottom line is at significant risk, and so is its stock price.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.