Trump's Tariffs Result in $900 Million Increase in Apple Costs

Apple is anticipating an increase in costs amounting to $900 million (approximately EUR791 million) for the current quarter, attributed to additional tariffs imposed by former U.S. President Donald Trump. According to Apple CEO Tim Cook, this estimate is based on the assumption that no further financial burdens will arise.

The company's revenue from iPhone sales experienced growth in the previous quarter, rising from $45.96 billion in the same period last year to $46.84 billion. Reports indicate that Apple is currently expanding its iPhone production capacity in India, as the majority of its devices have traditionally been manufactured in China.

Trump's administration initially imposed tariffs totaling 145% on goods imported from China but subsequently suspended these tariffs for electronic products, including smartphones and laptops. Cook shared with CNBC that approximately 50% of iPhones sold in the U.S. are now sourced from India. Looking ahead, Apple plans to supply the U.S. market with iPads, Mac computers, and smartwatches primarily from Vietnam in the upcoming quarter.

The iPhone remains Apple's most significant product, contributing nearly half of the company's total revenue. Overall, Apple's revenue grew by 5% year-over-year, reaching $95.4 billion (EUR84.50 billion), surpassing market expectations. The company reported a net profit of $24.78 billion, compared to around $23.64 billion during the same period last year.

However, within its services segment, which includes revenue from apps and subscriptions, Apple slightly missed analyst projections. Following the announcement, the company's stock price fell by 2.5% in after-hours trading. In the Greater China region, which also encompasses sales in Taiwan and Hong Kong, revenues saw a decline of about 2% year-over-year, totaling $16 billion. This drop follows a more significant decline of 11% in the fourth quarter of 2024.

As Apple navigates these financial challenges, the company's strategic shifts in production and market focus will be critical in mitigating the impacts of tariffs and maintaining its growth trajectory.