Connect with us

Archive

Apple Sees a Strong US Dollar as a Competitive Disadvantage

Archivebot

Published

on

In Apple’s (NASDAQ: APPL) fiscal year end filing with the US Securities and Exchange Commission, the company noted that it considers a relatively strong US dollar to be a threat to its business overseas.

While multinational companies always consider changes in global and regional economic conditions a risk factor for their business, Apple did not note this in the risk factors section of last year’s yearly filing. Between 2013 and 2014 the US dollar rose 7.74% on average compared to other major currencies, according to the US dollar index. Many analysts see a 1% rise of the US dollar against a benchmark of other currencies as a 2% loss in profits for major multinationals.

To put things into context, Coca-Cola (NYSE: KO) reported in its latest filing with the SEC that it expects a strong US dollar will shave 6% off its operating income due to major global customers buying less because of price increases (Coke sells its products to global suppliers in US dollars). IBM (NYSE: IBM) also had a similar pessimistic outlook.

But for Apple, hot off the release of the latest iPhone, a strong US dollar is only a concern and not a problem as the company is still expecting big jumps in revenue and profits due to global appetite for its new phone.

At the same time, international vendors — such as Taiwan’s Quanta (TPE: 2382) and Compal (TPE: 2324)  — that sell to the US have all reported gains over the last quarter due to increased buying power from US-based customers.

Original Author: Sam Reynolds


This news article is part of our extensive Archive on tech news that have been happening in the past 10 years. Here at BSN we love to cover the best tech news, so be sure to visit our homepage for up-to date stuff. Additionally, we take great pride in our Home Office section, as well as iGaming news, so be sure to check them out as well.

Continue Reading