Paul Stenhouse: Impact of tariffs on Apple, Nintendo halts pre-orders on the Switch 2

Apple is going to take a beating  

Goods shipped from China to the US will face 54% tariffs, and Vietnam —where Apple has shifted some of its manufacturing— has tariffs of 46%. The only good news for consumers is the inventory that's already in the US isn't subject to tariffs, and companies have been stockpiling inventory – but that will change.  

We also don't know how much of these tariffs will be absorbed into the profit margin, and how much will be passed on. It's partly why Apple's stock has taken a beating, because they're either going to see decreased revenue if consumers hold onto their devices longer, or their profits crunched by increased costs.  

  
Nintendo's halting pre-orders on its new console  

The hotly anticipated Switch 2 won't be taking pre-orders in the US on April 9th, as was the plan just two days ago. The company says it's taking the step "in order to assess the potential impact of tariffs and evolving market conditions”. Nintendo says the console’s June 5th release date is unchanged. They also haven’t said where its new consoles will be made.   

Initial feedback from the launch was about the price – from the console to the games to the accessories, things are more expensive all around. Switch 2 will hit stores at $449.99 USD / $799 NZD, along with new games “Mario Kart World” and “Street Fighter 6″. It's larger and faster than the OG Switch and includes a dedicated button to launch a chat with your friends. The improved processors mean 24 racers can compete in Mario Kart World at the same time.   

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Episode Transcript

Speaker 1 (00:07):
You're listening to the Saturday Morning with Jack team podcast
from News Talks at b Well.

Speaker 2 (00:13):
The fallout from Donald Trump's tariffs across the world continues
to escalate. The Chinese over night announcing that they would
introduce retaliatory tariffs. I think New Zealand's tariffs kickoff at
about midnight tonight. But our textbit Paul Steinehouse is here
with the details on a couple of the big companies
already feeling the effects of Donald Trump's new policy. And

(00:35):
Paul Apple is going to take a beating.

Speaker 3 (00:38):
Yeah, going to and already has two Jack. I was
just looking at the numbers just today, closed down seven
point three percent the last five days. It's down thirteen
percent on the past six months. It's almost down seventeen percent.
It's pretty but here's the one thing I did notice though,

(00:59):
if you go back to look it over the past year,
it's still up eleven percent. So I mean it is
a correction, I guess though I'm not a financial person,
and really, but you know, we're not down, down, down yet,
We're still down.

Speaker 2 (01:11):
Airport is still the market cap of Rapple is still
pretty impressive.

Speaker 3 (01:14):
Yeah, like two point nine trillion dollars, So it's ridiculous, right,
But I mean this is where like Apple's just taken
the real beating because I mean the first time around,
when Donald Trump was an office, they started to move
some of their production to Vietnam. Vietnam's tariffs are at
forty six percent, chins are at fifty four percent, so
they just can't win there. But it's like you for

(01:35):
the consumers in the US, I mean, the only good
news is that some of these companies have seen this coming.
They've pulled as much inventory into the United States as
they possibly can. And of course the tariffs don't apply
until the product crosses the border, right.

Speaker 1 (01:50):
So it's already in the country. You're good.

Speaker 3 (01:52):
But obviously that inventory will run out. And what we're
really looking to see with Apple, and this is why
there's just so much uncertainty with investors, is how much
of this will be passed on to the consumer. Donald Trump,
I think, actually came and see you know, he's been
talking to the big tech companies and he's they've reassured
them they're not going to pass it on. Well, I mean,
that still doesn't really help with the stock price, because

(02:15):
if they do increase the prices and put that onto consumers.
Apple's going to feel that because the assumption will be
that revenue will decrease, right because people are probably going
to hold onto their devices for longer. They're just not
going to have maybe as much discretionary spending. But they're
also hammered that if they take this on with, you know,
to take it out of their profit margin two or

(02:36):
their profits then get crushed. They don't have as much
capital to invest. Potentially, it's they don't really win at all,
and there's just this uncertainty. And it's the uncertainty too.
I don't know if you saw the this week, but
Nintendo Jack are putting out a brand new switch, the
Switch too, but now they don't know what they're going
to do. They've halted their pre orders on this new

(02:58):
console that was supposed to start in the US April
nine because they said, and this is the direct quote,
the company says they are taking the step in order
to assess the potential impact of tariffs and evolving market conditions.
So they don't even want to sell the thing.

Speaker 2 (03:14):
That's amazing. So presumably they've already sold some, right, and
now because of the tariffs, they might have to increase
the price.

Speaker 3 (03:21):
They may have to increase the price, which means there
only oh yeah, and stopping the pre orders in the
United States, And they're only announced the new switch like
a couple of days ago, and before they could even
start the pre order they said, actually, in the US,
we're going to hold that. So they're saying that the
console is still going to be for sale and be
released generally on June fifth, with the data unchanged and

(03:43):
the price unchanged. But I guess all of that is
you have to admit, or have to expect, is subject
to change.

Speaker 2 (03:49):
Yeah, and just on that.

Speaker 3 (03:51):
The switch is probably something that's been talked about in
people's households if they have young people. It's been hugely popular.
That's sold like one hundred and fifty million of the
first switch Jack. Yeah, but the reviews about the switch
to are awesome. It's faster, awesome, it's a bit bigger,
the screens a bit bigger, but not so awesome. The
price is going up yeah, and even more yeah, yeah, yeah,

(04:12):
maybe even more so. I think it's going to be
in New Zealand if it's on Christmas wish lists, like
eight hundred dollars. Oh yeah, I know, but there's some
new Mario Kart games and you're play it now. It's
up to twenty four people, so it's kind of like
so was lost. But there's a real uncertainty around just everything.
And I even heard, you know, this is me geeking
out today. I listened into the Finch Hears Q and

(04:33):
A he was doing with reporters, and all the questions
were just about uncertainty, uncertainty, uncertainty, uncertainty, what if people
do with uncertainty?

Speaker 2 (04:41):
Yeah, fascinating times. Thanks Paul. At least we've got new
Mario Kart games. Paul Stenhouse our text for there Before.

Speaker 1 (04:48):
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