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Kudlow: Apple Technology May Have Been 'Picked Off' by China

larry kudlow at white house podium
(Getty Images/Chip Somodevilla)

By    |   Friday, 04 January 2019 12:00 PM

White House economic adviser Larry Kudlow speculated Friday that Apple Inc.'s technology may have been stolen by the Chinese.

"I don't want to surmise too much here, but Apple technology may have been picked off by China and now China is becoming very competitive with Apple. You've got to have rule of law," the veteran financial guru and former Ronald Reagan adviser told Bloomberg.

"There are some indications from China that they're looking at that, but we don't know that yet. There's no enforcement; there's nothing concrete," said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.

Kudlow's claim came a day after Apple shares plunged 10 percent after the iPhone maker blamed weak China demand for a holiday-quarter revenue shortfall, with many investors worried the rare stumble was a harbinger for slowing global growth, Reuters reported.

Global financial markets felt the shockwaves as Apple shares (AAPL) logged their biggest intra-day percentage fall in six years, sending the company's stock market value to under $700 billion, well below its $1.1 trillion October peak.

After Apple's first revenue warning in nearly 12 years, investors also dumped chipmakers and tech stocks and flocked to perceived safe havens like U.S. Treasuries and the Japanese yen. Developments in a patent dispute between Apple and Qualcomm in Germany also rattled investors.

A senior White House economic adviser said he expected trade uncertainty to hit earnings at many U.S. companies, but that sales at Apple and others with large exposure to China would recover once Washington and Beijing strike a trade deal.

"That is having an impact on earnings and it's not going to be just Apple," White House Chairman of the Council of Economic Advisers Kevin Hassett said in an interview with CNN.

"I think there are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year."

Economic deceleration in China had caught Apple off guard and trade tensions between Washington and Beijing were starting to hurt consumer spending on smartphones in China, Apple Chief Executive Officer Tim Cook said on Wednesday.

Cook in November had cited slowing growth in emerging markets such as Brazil, India and Russia when Apple gave first-quarter sales estimates that were lower than expected. But he said then that he "would not put China in that category" of countries with troubled growth.

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White House economic adviser Larry Kudlow speculated Friday that Apple Inc.'s technology may have been stolen by the Chinese.
kudlow, apple, china, technology
Friday, 04 January 2019 12:00 PM
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