Trade war | KitGuru https://www.kitguru.net KitGuru.net - Tech News | Hardware News | Hardware Reviews | IOS | Mobile | Gaming | Graphics Cards Wed, 26 Jun 2019 17:41:07 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.kitguru.net/wp-content/uploads/2021/06/cropped-KITGURU-Light-Background-SQUARE2-32x32.png Trade war | KitGuru https://www.kitguru.net 32 32 Microsoft, Sony and Nintendo band together to warn US gov against increased China tariffs https://www.kitguru.net/gaming/matthew-wilson/microsoft-sony-and-nintendo-band-together-to-warn-us-gov-against-increased-china-tariffs/ https://www.kitguru.net/gaming/matthew-wilson/microsoft-sony-and-nintendo-band-together-to-warn-us-gov-against-increased-china-tariffs/#respond Wed, 26 Jun 2019 15:14:18 +0000 https://www.kitguru.net/?p=416562 Many major tech companies have been contacting the US government regarding its proposed tariffs on products manufactured in China. Up to this point, we have mostly been hearing from PC hardware and OEMs like Apple, Intel etc. Today, Microsoft, Sony and Nintendo released a joint letter regarding these tariffs, strongly warning the US of the …

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Many major tech companies have been contacting the US government regarding its proposed tariffs on products manufactured in China. Up to this point, we have mostly been hearing from PC hardware and OEMs like Apple, Intel etc. Today, Microsoft, Sony and Nintendo released a joint letter regarding these tariffs, strongly warning the US of the pitfalls involved with increasing costs.

This is the first time we've heard about how the US trade war with China can impact the gaming market. The three big console makers warn that new and increased tariffs on video game consoles would “injure consumers, video game developers, retailers and console manufacturers”. It would also put “thousands of high-value U.S. jobs at risk and stifle innovation”.

 

The letter goes on to say: “While we appreciate the Administration’s efforts to protect U.S. intellectual property and preserve U.S. high-tech leadership, the disproportionate harm caused by these tariffs to U.S. consumers and businesses will undermine—not advance—these goals”.

“In 2018, over 96% of video game consoles imported into the United States were made in China. The video game console supply chain has developed in China over many years of investment by our companies and our partners. It would cause significant supply chain disruption to shift sourcing entirely to the United States or a third country, and it would increase costs—even beyond the cost of the proposed tariffs—on products that are already manufactured under tight margin conditions. Each video game console comprises dozens of complex components sourced from multiple countries. A change in even a single supplier must be vetted carefully to mitigate risks of product quality, unreliability and consumer safety issues. Tariffs would significantly disrupt our companies’ businesses and add significant costs that would depress sales of video game consoles and the games and services that drive the profitability of this market segment.”

According to the letter, if the US increases its tariffs as much as it is proposing, then consumers would end up paying an estimated $840 million more when combined and even when accounting for this result, the U.S. economy would still lose around $350 million for each year the tariffs remain in effect. In the long term, this would cause the major console makers to reduce their investment in new technologies and would ultimately harm innovation.

Microsoft, Sony and Nintendo all say that they “appreciate the Administration's goal of strengthening the protection of IP in China” but video game consoles aren't being targeted by China. According to the three console makers, Chinese-developed and branded video game consoles are almost non-existent and aren't well received by the market over there. In all, the three companies hope that the US government won't end up imposing these tariffs on video game consoles.

KitGuru Says: Microsoft, Sony and Nintendo all target US pricing first and foremost before figuring out how much games and systems should cost elsewhere in the world. With that in mind, changes in the US economy could end up having an unwanted impact in other parts of the world. A number of major tech companies are all speaking out against these new tariffs, which will hopefully lead this proposal to go back to the drawing board to be reconsidered.  

 

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Apple reportedly looking to move up to 30 percent of production out of China https://www.kitguru.net/lifestyle/mobile/apple/matthew-wilson/apple-reportedly-looking-to-move-up-to-30-percent-of-production-out-of-china/ https://www.kitguru.net/lifestyle/mobile/apple/matthew-wilson/apple-reportedly-looking-to-move-up-to-30-percent-of-production-out-of-china/#respond Wed, 19 Jun 2019 12:00:49 +0000 https://www.kitguru.net/?p=416015 Discussion around the strained relationship between the US and China is continuing this week. Some of tech's biggest companies are concerned about the Huawei ban, meanwhile others are starting to look at moving production out of China to avoid tariffs. Last week we talked about Nintendo Switch production moving out of China and this week, …

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Discussion around the strained relationship between the US and China is continuing this week. Some of tech's biggest companies are concerned about the Huawei ban, meanwhile others are starting to look at moving production out of China to avoid tariffs. Last week we talked about Nintendo Switch production moving out of China and this week, reports indicate that Apple will be moving a chunk of its manufacturing as well.

Apple partners with many different companies to obtain components for its devices but much of the production and assembly takes place in China. With the US imposing stricter tariffs on imports from China, this could end up having a large impact on Apple's profit margin in the future. To try and avoid this, Apple has reportedly asked its major suppliers to evaluate costs and shift 15 to 30 percent of their production capacity from China to Southeast Asia.

According to sources speaking with Nikkei, this is a step that Apple will be looking to take even if the situation between the US and China begins to cool down. Apple has relied heavily on China's production facilities for years and the new approach will be to diversify to protect against situations like this from creeping up again.

This might not be great news for those working on Apple products in China though. Apple itself employs around 10,000 staff in China and around five million jobs rely on Apple's presence in China, although that number is spread across production, software development and other areas.

KitGuru Says: The US-China situation is something that will affect a ton of hardware areas, from phones and game consoles to PC components. Many others will be exploring supply and production chain alternatives as things continue. 

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Nintendo starts moving Switch production out of China to avoid US trade tariffs https://www.kitguru.net/gaming/matthew-wilson/nintendo-starts-moving-switch-production-out-of-china-to-avoid-us-trade-tariffs/ https://www.kitguru.net/gaming/matthew-wilson/nintendo-starts-moving-switch-production-out-of-china-to-avoid-us-trade-tariffs/#respond Wed, 12 Jun 2019 12:48:25 +0000 https://www.kitguru.net/?p=415551 There has been a lot of talk around the US trade war with China and its impact on the mobile market, but there has been less discussion surrounding how it is going to impact other areas of tech. Today, we are starting to see how other companies are planning to deal with it, as Nintendo …

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There has been a lot of talk around the US trade war with China and its impact on the mobile market, but there has been less discussion surrounding how it is going to impact other areas of tech. Today, we are starting to see how other companies are planning to deal with it, as Nintendo has begun moving Switch production outside of China to avoid trade issues.

According to Nintendo supply chain sources speaking with The Wall Street Journal, Nintendo has begun moving Switch production to Southeast Asia in order to produce stock for the US without being hit by trade penalties.

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Interestingly, the sources cited say that production on the current Switch model has begun in Southeast Asia, in addition to two new Switch versions. Nintendo has repeatedly denied reports that another Switch version is coming out but sources are being very persistent.

Right now, the belief is that we will be seeing a cheaper Switch model first and then later on, there will be a more powerful version.

KitGuru Says: Nintendo wants to avoid potential price hikes on the Switch to offset increased US-China tariffs, so this move makes sense. Nintendo likely won’t be the only company making this move, others are sure to follow if these issues continue.

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Intel, Qualcomm, Microsoft and more could lose revenue due to US crackdown on Huawei https://www.kitguru.net/channel/generaltech/matthew-wilson/intel-qualcomm-microsoft-and-more-could-lose-revenue-due-to-us-crackdown-on-huawei/ https://www.kitguru.net/channel/generaltech/matthew-wilson/intel-qualcomm-microsoft-and-more-could-lose-revenue-due-to-us-crackdown-on-huawei/#respond Wed, 22 May 2019 12:45:15 +0000 https://www.kitguru.net/?p=413421 The trade war between the US and China is going to be a double-edged sword for many tech companies.

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This week has been a bit of a roller coaster in the tech world as the US government's trade war with China is starting to have quite the impact. At this point. Huawei has had its full Android license revoked by Google and according to reports, US chip makers are also going to stop supplying to the company.

According to sources speaking with Bloomberg, chip makers ranging from Intel, Qualcomm, Broadcom, Xilinx and others will be freezing their supply to Huawei. Losing out on that revenue is expected to cost these US companies hundreds of millions of dollars in the long run, so the ban is a double edged sword that hurts both sides.

Microsoft is another major tech firm involved in all of this at the moment. Right now, the company is staying quiet on pulling Windows 10 access from Huawei, but reports suggest that Microsoft Store employees have already been pulling Huawei laptops from sale.

On the smartphone side, Huawei has been preparing for this outcome by developing its own alternative operating systems for some time. The company has also been stockpiling chips so that it can continue to meet supply demands for its currently released devices in the months to come.

KitGuru Says: We've been chatting with some industry sources and there does seem to be quite a bit of concern around the US-China trade relationship right now, even in the PC hardware space. Huawei is making a lot of headlines right now, but if this continues, there will be an impact on plenty of other companies that rely on the China, whether its for additional sales or manufacturing capabilities. 

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