Apple has projected that US tariffs will add $900 million to its costs for the current quarter, despite the relatively limited impact of the tariffs at the beginning of the year, according to CEO Tim Cook during an earnings call.
While Cook noted that Apple’s products remain exempt from some of the most severe tariffs, particularly under former President Trump’s policies, he expressed uncertainty about future tariff changes before the quarter ends.
Cook highlighted that a significant portion of iPhones sold in the US would likely be manufactured in India, reflecting a shift in production as part of the company’s broader strategy to mitigate tariff impacts.
“We are not able to precisely estimate the impact of tariffs due to potential changes in policy,” Cook said, adding that the $900 million estimate assumes no new tariffs or policy adjustments during the quarter.
The US and China have been engaged in tit-for-tat tariff exchanges, with high-end tech products like smartphones and computers temporarily exempted from the heaviest levies. However, Canalys research manager Le Xuan Chiew pointed out that Apple has proactively stockpiled inventory ahead of anticipated tariff changes and may continue moving more production to India to reduce its exposure to future risks.
While China remains the main production hub for Apple’s global market, the company has been ramping up its production in India, especially for US-bound iPhones. Cook also confirmed that nearly all iPads, Macs, Apple Watches, and AirPods sold in the US will originate from Vietnam, while China will continue to supply most of Apple’s global markets outside the US.
Apple reported quarterly revenue of $95.4 billion, driven by iPhone sales, with $17 billion coming from China. However, despite this strong performance, Apple’s stock saw a 3% drop in after-market trading.
Analysts, including Emarketer’s Jacob Bourne, emphasized the challenges Apple faces in executing its manufacturing shift to India, raising concerns over production timelines, capacity limits, and potential cost increases.
