Apple has projected a $900 million hit from U.S. tariffs in the current quarter, despite minimal early-year impact, CEO Tim Cook revealed during an earnings call on Thursday. This estimate comes amid escalating trade tensions and a strategic move to diversify manufacturing away from China.
Cook emphasized that a majority of iPhones sold in the U.S. will soon originate from India, a critical shift aimed at reducing tariff exposure. While high-end tech items like smartphones and semiconductors have temporarily dodged harsh tariffs, unpredictability in reciprocal trade policies remains a concern.
“It’s difficult to pinpoint the exact tariff impact, given the volatility of global trade policies,” Cook explained. If no new duties are introduced this quarter, Apple still anticipates an added $900 million to operational costs.
Canalys analyst Le Xuan Chiew noted that Apple stockpiled inventory to buffer against tariff shocks and is now ramping up Indian production. Despite these moves, China continues to produce the majority of iPhones, though India is catching up.
Additionally, Cook confirmed that most iPads, Macs, Apple Watches, and AirPods bound for the U.S. will now be made in Vietnam, while China remains key for non-U.S. markets.
Apple’s quarterly revenue hit $95.4 billion, fueled by strong iPhone sales, including $17 billion from China, while profits stood at $24.8 billion. Still, shares dropped over 3% in after-hours trading.
Industry experts warn of challenges ahead, from capacity constraints in India to possible cost increases impacting margins or consumer prices.
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