Apple reported first-quarter profits on Thursday that exceeded expectations, but warned that US tariffs are costing the company and disrupt the supply chain.
Apple expects its tariffs to cost $900 million this quarter, despite the impact “limited” earlier this year, CEO Tim Cook said in a revenue call.
“We hope that the majority of iPhones sold in the US will have India as their country of origin,” Cook said, adding that Apple's products are now exempt from Trump's most serious mutual tariffs.
“We cannot accurately estimate the impact of tariffs because potential future actions are uncertain by the end of the quarter,” Cook said. “We estimate the impact of adding $900 million to our costs, assuming that current global tariff charges, policies and applications remain unchanged on quarterly balances and no new tariffs are added.”
The tough exchange has put US taxes on China, and Beijing has set a retaliatory barrier to US imports.
High-end, high-tech products such as smartphones, semiconductors and computers have received a temporary reprieve from US tariffs.
“Apple has actively built inventory ahead of expected tariff policies,” said Le Xuan Chiew, research manager at Canalys. “With the ongoing fluctuations in mutual tariff policies, Apple is likely to further transform US-bound production into India to reduce exposure to future risks.”
According to Canalys, iPhones produced in mainland China still account for the majority of US shipments, but India's production rose towards the end of the quarter.
Cook said Vietnam will be the country of origin for almost all iPads, Macs, Apple Watch and Airpod products sold in the US.
China will remain a place where most Apple products are sold outside the US, he argued.
According to a revenue report, Apple's $95.4 billion revenue for the most recent closing quarter was iPhone sales, with the company winning $17 billion in the Chinese market. Quarterly profit was $24.8 billion.
Apple's stock slipped over 3% in aftermarket trading.
“The real story lies in Tim Cook's plan to navigate these unprecedented trade challenges,” said emmarketer analyst Jacob Bourne.
Apple's plan to shift to India raises pressing questions about execution timelines, capacity limits and potentially inevitable increases in costs.
(Except for the headline, this story has not been edited by NDTV staff and is published by Syndicate Feed.)
