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Then there’s Apple. The trade war combined with China’s slowing economy present a significant short-term threat to the company’s profits. As we note in section 1, smartphone handset sales in China in August were reported at 32.6 million units, a decline of 20.9% year-over-year and 11.8% month-on- month. Moreover, no firm could suffer more if China decides to target tech supply chains in retaliation to Trump’s tariffs. Yet, the risks extend beyond Asia. On Wednesday, Apple announced its newest generation of iPhones. It is following the same strategy as last year, releasing ever-more expensive phones as it tries to keep profit growth on pace despite a largely-matured smartphone market. As The Wall Street Journal reported this week, projections suggest last year’s $1,000 iPhone X underperformed previous launches: “Even for Apple and its devoted fans, the art of the upsell appears to have some limits...Analysts believe the iPhone X has accounted for about 30% of iPhone unit sales in the recent nine-month period...That is below the share the company’s newest models typically get in a given cycle.” Will a $1,200 iPhone cross the limits of what the market will tolerate? We have roughly a month until 3Q18 earnings season begins. For years, big tech’s remarkable profit trajectory has generated an air of invincibility. BAT’s earnings miss combined with Facebook’s earnings miss has cracked that expectation. As news reports of regulatory threats continue to flood in and as tech giant profit doubts mount, the weeks to come could see that crack turn to a fissure. Then there’s Apple. The trade war combined with China’s slowing economy present a significant short-term threat to the company’s profits. As we note in section 1, smartphone handset sales in China in August were reported at 32.6 million units, a decline of 20.9% year-over-year and 11.8% month-on- month. Moreover, no firm could suffer more if China decides to target tech supply chains in retaliation to Trump’s tariffs. Yet, the risks extend beyond Asia. On Wednesday, Apple announced its newest generation of iPhones. It is following the same strategy as last year, releasing ever-more expensive phones as it tries to keep profit growth on pace despite a largely-matured smartphone market. As The Wall Street Journal reported this week, projections suggest last year’s $1,000 iPhone X underperformed previous launches: “Even for Apple and its devoted fans, the art of the upsell appears to have some limits...Analysts believe the iPhone X has accounted for about 30% of iPhone unit sales in the recent nine-month HOUSE_OVERSIGHT_032809