My view. Parts sources in China will be cheaper. So iPhones will have lower cost of goods and thus higher gross margins...will allow for more ads and promotions with the fatter margins.
The reason for devaluing the yuan is to boost China competitiveness overseas...boost exports, increase economic growth, create more and better jobs...This may support higher iPhone sales. Less expensive Chinese phones already are MUCH LESS expensive than iPhones. So if devalued yuan makes iPhones a tad more expensive, no big deal...plus, a more robust Chinese economy (say, 6-7.5% GDP growth) would seem to help iPhone sales.
The biggest issue, in my mind, is whether iPhones (and all of the apps and utilities and features they include)offer or can be perceived by customers to offer a lot more value than cheaper Chinese phones. That's as true in China as in the USA and elsewhere.
Fact: Interest on debt is tax deductible and dividends are not.
Nevertheless, I think Apply is totally nuts to be buying back stock to save the small dividend when it could be investing in buying other companies, in advertising and promotion to build business, and generally in pursuing strategies to build and strengthen the company and broaden its footprint in technology. To me, stock buybacks are saying to the world that the company has no clue what to do with its cash to strengthen the business.