06
de Setembre
de
2016
Act.
06
de Setembre
de
2016
With great ceremony, the Bill Graham centre in San Francisco, in the United States, is currently preparing for the Wednesday 7th September (7pm, Spanish time) keynote speech launching the new iPhone 7. The new device, about which there is less expectation than in previous years -as VIA Empresa has already explained- arrives at a "difficult" time for the company, which has just been hit by a fine from the European Commission for tax evasion in Ireland.
Whether it be due to the expectation surrounding the latest launch or due to a change of behaviour in its market, the latest published figures for the Cupertino firm show a fall in business. The report for Apple's third fiscal quarter (which ended in June 2016) reveals a drop in profits compared with the same period a year earlier. If in June it made sales worth 42.4 billion dollars, with a net profit of 7.8 billion dollars, in 2015 sales figures reached 49.6 billion dollars.
The balance continues Apple's economic situation from the second fiscal quarter, in April this year, which saw a 13% fall in sales and, therefore, a drop in net profits of 3.1 billion dollars compared with the previous year.
The fine of contention
As if the fall in Apple's sales and profits was not enough, the US multinational was afflicted by another headache at the end of August: a 13 billion-euro fine from the European Commission for allegedly receiving fiscal support in Ireland. The union argues that the Irish government conceded tax advantages to Apple between 2003 and 2014 that amounted to illegal state aid and that allowed the firm to pay "substantially less" tax than other companies.
The firm, obviously concerned about a fine that is double its profits from the last quarter, has already announced it will fight the decision. In a statement addressed to "the Apple community in Europe", Tim Cook defended the company's actions pointing to three decades of investment in Ireland. Apple points out that it opened in Cork in 1980, during a time when the country "suffered from high unemployment and extremely low economic investment." The tech giant argues that its presence helped to attract investment and make "the local economy stronger than ever."
Apple recognises that "tax for multinational companies are complex," but it defends its role as a major taxpayer in Ireland, the United States and the world. It insists it has received the same guidance on tax from the Irish authorities as any other company, and sees no legal basis for the fine imposed.
For Apple, the European Commission's decision is "a devastating blow to the sovereignty of EU member states and to the principle of certainty of law in Europe." The company says that it, Ireland and the United States are in agreement about the principle that the tax on a company's profits should be collected in the country where the value is created. It suggests that the European Commission's decision puts any company in Europe at risk of suddenly becoming subject to tax based on laws that never existed before.
The Commission's move against Apple, perhaps the most iconic company in the United States, comes at a moment in which the TTIP free trade agreement between the two economies is on the point of dying before it is even born. Whether coincidence or not, the scandal affecting one of the key symbols of European industry, Volkswagen, came to light in the United States.
In all, Tim Cook, Apple's CEO, has expressed his contentment for "the huge strength of the Apple ecosystem and for our growing install base of more than 1 billion active devices." On 27th July, Cook boasted that the firm had reached the figure of 1 billion iPhones sold and thanked clients for helping to change the world. Yet these obvious strengths could end up becoming weaknesses due to the ferocious competition from Samsung that, as published on the IDC Research website, is the company that tops the ranking in smartphone sales with a market share of 22.4% and more than 77 million mobile devices sold in the second quarter of 2016. Will it be Samsung that ends up taking a bite out of the tech giant's success?
Whether it be due to the expectation surrounding the latest launch or due to a change of behaviour in its market, the latest published figures for the Cupertino firm show a fall in business. The report for Apple's third fiscal quarter (which ended in June 2016) reveals a drop in profits compared with the same period a year earlier. If in June it made sales worth 42.4 billion dollars, with a net profit of 7.8 billion dollars, in 2015 sales figures reached 49.6 billion dollars.
The balance continues Apple's economic situation from the second fiscal quarter, in April this year, which saw a 13% fall in sales and, therefore, a drop in net profits of 3.1 billion dollars compared with the previous year.
The fine of contention
As if the fall in Apple's sales and profits was not enough, the US multinational was afflicted by another headache at the end of August: a 13 billion-euro fine from the European Commission for allegedly receiving fiscal support in Ireland. The union argues that the Irish government conceded tax advantages to Apple between 2003 and 2014 that amounted to illegal state aid and that allowed the firm to pay "substantially less" tax than other companies.
The firm, obviously concerned about a fine that is double its profits from the last quarter, has already announced it will fight the decision. In a statement addressed to "the Apple community in Europe", Tim Cook defended the company's actions pointing to three decades of investment in Ireland. Apple points out that it opened in Cork in 1980, during a time when the country "suffered from high unemployment and extremely low economic investment." The tech giant argues that its presence helped to attract investment and make "the local economy stronger than ever."
Apple recognises that "tax for multinational companies are complex," but it defends its role as a major taxpayer in Ireland, the United States and the world. It insists it has received the same guidance on tax from the Irish authorities as any other company, and sees no legal basis for the fine imposed.
For Apple, the European Commission's decision is "a devastating blow to the sovereignty of EU member states and to the principle of certainty of law in Europe." The company says that it, Ireland and the United States are in agreement about the principle that the tax on a company's profits should be collected in the country where the value is created. It suggests that the European Commission's decision puts any company in Europe at risk of suddenly becoming subject to tax based on laws that never existed before.
The Commission's move against Apple, perhaps the most iconic company in the United States, comes at a moment in which the TTIP free trade agreement between the two economies is on the point of dying before it is even born. Whether coincidence or not, the scandal affecting one of the key symbols of European industry, Volkswagen, came to light in the United States.
In all, Tim Cook, Apple's CEO, has expressed his contentment for "the huge strength of the Apple ecosystem and for our growing install base of more than 1 billion active devices." On 27th July, Cook boasted that the firm had reached the figure of 1 billion iPhones sold and thanked clients for helping to change the world. Yet these obvious strengths could end up becoming weaknesses due to the ferocious competition from Samsung that, as published on the IDC Research website, is the company that tops the ranking in smartphone sales with a market share of 22.4% and more than 77 million mobile devices sold in the second quarter of 2016. Will it be Samsung that ends up taking a bite out of the tech giant's success?