Tim Cook’s diplomacy with White House and China praised

Tim Cook’s diplomacy in dealing with both the White House and China has reportedly been key to investor confidence, playing a significant role in the current share price.

Cook has had to tread a careful path in trying to calm the Trump administration while also aiming to persuade the Chinese government not to exact revenge on Apple for US government policies…

Reuters says this is the view conveyed to it by both investors and analysts.

When Apple reports results on Wednesday, Wall Street expects flat fiscal fourth-quarter sales and lower full-year revenue compared with the prior year, mostly because of declining iPhone sales. Yet Apple’s stock price has hit all-time highs in recent weeks, as has its price-to-earnings valuation.

Investors and analysts told Reuters that much of the explanation lies in Apple Chief Executive Tim Cook’s skillful management of relationships in Washington, Beijing and Wall Street.

Cook has fostered a relationship with U.S. President Donald Trump, dining with him and conveying Apple’s views on tariffs and U.S. manufacturing. He has also kept strong enough relations with Chinese officials to avoid Apple’s becoming a target of explicit retaliation.

One investment company said that Cook showed ‘an incredible amount of nuance and emotional intelligence’ in dealing with Trump.

Apple still has big challenges in China, with a fresh report today suggesting that Q3 iPhone shipments in the country fell by 28% as a direct result of consumer unhappiness at US treatment of China. But many say that declining sales in China is already priced-in to the stock.

“If the industry is worth being in, you should assume that over the course of time it’s going to be dominated by Chinese national champions,” said Erik Gordon, a professor at the Ross School of Business at the University of Michigan.

Not everyone has such a charitable view of Tim Cook’s diplomacy. Some have accused him of appeasing the Chinese government by pulling a Hong Kong protest app from the local App Store, and similar actions in the past.

Apple first banned, then allowed, then again banned the HKmap app, which shows map locations with a heavy police presence. Hong Kong legislative councilor and tech entrepreneur Charles Mok responded by accusing Apple of being ‘an accomplice for Chinese censorship and oppression.’

In some cases, like removing VPN apps, Apple has no choice: it has to comply with the law. But I’ve argued that Apple’s dependence on China for both manufacturing a significant chunk of its sales has the potential to grow into a massive PR liability.

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