Apple says tariffs will add an estimated US$900 million to their costs

Apple announced its Q2 financial results earlier today, and while the results were promising—US$95.4 billion in revenue and US$24.8 billion in profit—the company warned that the next quarter could be challenging because of the tariff situation.

During the earnings calls, Apple CEO Tim Cook said that the tariffs had a “limited impact” on the last quarter because they were able to optimise its supply chain and inventory.

As for the next quarter, Cook had this to say:

For the June quarter, currently, we are not able to precisely estimate the impact of tariffs, as we are uncertain of potential future actions prior to the end of the quarter. However, for some color, assuming the current global tariff rates, policies and applications do not change for the balance of the quarter, and no new tariffs are added, we estimate the impact to add $900 million to our costs. This estimate should not be used to make projections for future quarters, as there are certain unique factors that benefit the June quarter.

Most recently, Trump decided that phones, laptops, hard drives, processors, memory chips, GPUs, semiconductors, and the equipment used to manufacture them are all exempted from tariffs.

However, he also said that this would only be a temporary exemption and that these devices and components would eventually be put into, what he called, “a different Tariff ‘bucket’.”

It’s unknown what this bucket would be and what percentage tariff they would be subjected to, which makes it hard for anyone to predict what possible effects and ramifications might be.

Cook also explained that most iPhones coming to the US will have India as their country of origin. As for Macs, iPads, AirPods, and Apple Watches, those will come almost exclusively from Vietnam. He said that devices made in China will be used to supply to the rest of the world.

Finally, Cook did not elaborate if these tariffs would force Apple to increase prices. In response to this question, he said:

We have nothing to announce today. I’ll just say that the operational team has done an incredible job around optimizing the supply chain of the inventory, and we’ll obviously continue to do those things to the degree that we can.

That said, it’s inconceivable that Apple would happily absorb this cost for long. An earlier report said prices of iPhones could rise by as much as 43% if Trump insists on implementing his “reciprocal tariffs”.

Source: MacRumors

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