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Tim Cook: Trump tariffs, China trade war hurt Apple, iPhone sales

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Tim Cook Donald TrumpTim Cook and President Donald TrumpGetty

  • Apple issued a surprising warning about its upcoming quarterly earnings on Wednesday, lowering its revenue target substantially.
  • Apple CEO Tim Cook placed a significant portion of the blame on China’s economic slowdown, which Cook said was caused in part by President Donald Trump’s trade war.
  • “We believe the economic environment in China has been further impacted by rising trade tensions with the United States,” Cook wrote.
  • Apple is an example of how tariffs can indirectly harm American companies.

Apple CEO Tim Cook laid some of the blame for the company’s shock revenue guidance downgrade on the trade war between the US and China.

In an interview with CNBC on Wednesday, Cook said tariffs imposed by the US and China on products from the opposite country contributed to an economic slowdown in China. The Chinese economic slowdown in turn decreases retail sales in the country and hurt Apple’s overall business.

“And what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy,” Cook said. “So we saw as the quarter went on things like traffic in our retail stores, traffic in our channel partner stores, the reports of the smartphone industry contracting, particularly bad in November. I haven’t seen a December number yet, but I’d bet it would not be good either.”

Cook also highlighted the trade war’s impact on Apple’s sales in a letter to shareholders announcing the reduced revenue target.

“We believe the economic environment in China has been further impacted by rising trade tensions with the United States,” he wrote.

In total, Apple estimated that revenue for the company’s first fiscal quarter would come in around 7.6% lower than a previously expected $84 billion. The original guidance called for revenues between $89 billion and $93 billion.

While Apple did not place complete blame on the trade war — the company also cited the strong US dollar, reduced battery replacement prices, and more — the tariff battle between the US and China appears to have taken its toll on the tech giant.

There may still be more worries on the trade front for Apple, as well. Current US tariffs on Chinese goods do not include many consumer electronics like those manufactured by Apple, and some Apple products were dropped from a preliminary list of goods that were subject to tariffs in September.

But President Donald Trump told The Wall Street Journal in November that the iPhone and other Apple products could be hit by the next round of tariffs, which would cover the $255 billion in Chinese products not currently involved in the trade war. Apple previously warned that tariffs on their products would harm the company. 

The US and China agreed to a trade war truce at the start of December and have put any additional tariffs on hold. But that truce is only set to last until March 1. And Trump’s lead trade negotiator, US Trade Representative Robert Lighthizer, reportedly wants to deploy additional tariffs to pressure the Chinese.

Read more: One chart shows just how badly US companies are getting whacked by Trump’s trade war»

Regardless of the trade war’s future, Cook’s statements make it clear that Trump’s trade war with China is indirectly harming one of the America’s largest companies. The announcement is also an example of the highly integrated supply chains US companies use — and how tariffs can disrupt those firms’ ability to do business.

In response to the news, Apple’s stock fell by over 7% in after-hours trading to $146.40 a share.

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More groups join in support of women in STEM program at Carleton

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OTTAWA — Major companies and government partners are lending their support to Carleton University’s newly established Women in Engineering and Information Technology Program.

The list of supporters includes Mississauga-based construction company EllisDon.

The latest to announce their support for the program also include BlackBerry QNX, CIRA (Canadian Internet Registration Authority), Ericsson, Nokia, Solace, Trend Micro, the Canadian Nuclear Safety Commission, CGI, Gastops, Leonardo DRS, Lockheed Martin Canada, Amdocs and Ross.

The program is officially set to launch this September.

It is being led by Carleton’s Faculty of Engineering and Design with the goal of establishing meaningful partnerships in support of women in STEM.  

The program will host events for women students to build relationships with industry and government partners, create mentorship opportunities, as well as establish a special fund to support allies at Carleton in meeting equity, diversity and inclusion goals.

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VR tech to revolutionize commercial driver training

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Serious Labs seems to have found a way from tragedy to triumph? The Edmonton-based firm designs and manufactures virtual reality simulators to standardize training programs for operators of heavy equipment such as aerial lifts, cranes, forklifts, and commercial trucks. These simulators enable operators to acquire and practice operational skills for the job safety and efficiency in a risk-free virtual environment so they can work more safely and efficiently.

The 2018 Humboldt bus catastrophe sent shock waves across the industry. The tragedy highlighted the need for standardized commercial driver training and testing. It also contributed to the acceleration of the federal government implementing a Mandatory Entry-Level Training (MELT) program for Class 1 & 2 drivers currently being adopted across Canada. MELT is a much more rigorous standard that promotes safety and in-depth practice for new drivers.

Enter Serious Labs. By proposing to harness the power of virtual reality (VR), Serious Labs has earned considerable funding to develop a VR commercial truck driving simulator.

The Government of Alberta has awarded $1 million, and Emissions Reduction Alberta (ERA) is contributing an additional $2 million for the simulator development. Commercial deployment is estimated to begin in 2024, with the simulator to be made available across Canada and the United States, and with the Alberta Motor Transport Association (AMTA) helping to provide simulator tests to certify that driver trainees have attained the appropriate standard. West Tech Report recently took the opportunity to chat with Serious Labs CEO, Jim Colvin, about the environmental and labour benefits of VR Driver Training, as well as the unique way that Colvin went from angel investor to CEO of the company.

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Next-Gen Tech Company Pops on New Cover Detection Test

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While the world comes out of the initial stages of the pandemic, COVID-19 will be continue to be a threat for some time to come. Companies, such as Zen Graphene, are working on ways to detect the virus and its variants and are on the forefronts of technology.

Nanotechnology firm ZEN Graphene Solutions Ltd. (TSX-Venture:ZEN) (OTCPK:ZENYF), is working to develop technology to help detect the COVID-19 virus and its variants. The firm signed an exclusive agreement with McMaster University to be the global commercializing partner for a newly developed aptamer-based, SARS-CoV-2 rapid detection technology.

This patent-pending technology uses clinical samples from patients and was funded by the Canadian Institutes of Health Research. The test is considered extremely accurate, scalable, saliva-based, affordable, and provides results in under 10 minutes.

Shares were trading up over 5% to $3.07 in early afternoon trade.

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