Last weekend, President Donald Trump announced that Apple would not be exempt from tariffs, causing its stock to plummet more than 3% and its market capitalization to fall below 3 trillion USD. This was a major shock to the company.
Apple was not only the first U.S. company to surpass 3 trillion USD in market capitalization but also the largest U.S. company by market capitalization.
However, now that it has become a target of Trump’s tariff threat, its stock price is expected to decline even further.
Especially with Apple already facing a series of challenges, Trump’s tariff threat could well be the straw that breaks the camel’s back.
Apple has been struggling with a sharp decline in Chinese sales, an exodus of top talent, and increased scrutiny from regulators worldwide.
China, Apple’s largest market outside North America, has seen a significant drop in sales. In the first quarter, Apple’s sales in China fell 2.3% year-over-year, as more Chinese consumers opted for domestic brands such as Huawei.
Adding to Apple’s woes, it is also hemorrhaging talent. One of its top executives – once dubbed Steve Jobs’ “spiritual partner” – recently left to join OpenAI.
Jony Ive, the “world’s greatest designer” behind the iPhone and Apple Watch, has joined OpenAI.
OpenAI acquired IO, an AI device development startup founded by Ive, for 6.5 billion USD – the largest acquisition in OpenAI’s history.
About 55 hardware engineers and software developers, including Ive, will oversee design efforts at OpenAI.
Ive, once referred to as Steve Jobs’ “spiritual partner,” worked at Apple from 1992 to 2019, overseeing the development of Apple’s iconic products, including the iMac, AirPods, iPod, iPhone, and Apple Watch.
Some suggest that this talent drain is a symbolic sign that Apple’s golden era may be ending.
In addition, regulators worldwide are tightening antitrust regulations, leaving Apple besieged on all fronts.
Trump’s tariff threat couldn’t come at a worse time for Apple and may be the straw that breaks the camel’s back.
In the wake of these mounting challenges, CEO Tim Cook, who has successfully led the company since the passing of founder Steve Jobs, may be in for many sleepless nights.