Washington [US], May 2: Apple on May 1 reported first-quarter 2025 profit that exceeded expectations but warned that U.S. tariffs could cost the company more and disrupt Apple's supply chain, according to AFP.
Apple CEO Tim Cook said Apple expects U.S. tariffs to cost the company $900 million in the second quarter of 2025 (from April-June), although the impact of the tariffs was "limited" earlier this year.
U.S.-China trade tensions heated up after the U.S. imposed heavy tariffs on China, while Beijing set up retaliatory barriers to U.S. imports. However, high-end tech items such as smartphones, semiconductors and computers have been temporarily exempted from US tariffs.
Cook said Apple products are currently exempt from US President Donald Trump's most severe reciprocal tariffs. Cook added that he expects the majority of iPhones sold in the U.S. to be made in India.
"Apple has been proactive in building inventory ahead of expected tariff policies. With continuous fluctuations in reciprocal tax policies, Apple is likely to move more production in the US to India to mitigate future risks," said Le Xuan Chiew, director of research at Canalys.
According to Canalys, while iPhones made in mainland China still account for the majority of shipments in the US, production in India has accelerated by the end of the first quarter of 2025.
Cook added that Vietnam will be home to most iPad, Mac, Apple Watch and AirPod products sold in the U.S., and China will continue to be the home of most Apple products sold outside the U.S.
"The real story lies in Tim Cook's plan to overcome these unprecedented commercial challenges," said Jacob Bourne, an analyst at market research firm Emarketer. He said Apple's plan to move production to India raises pressing questions about implementation time, capacity constraints and the possibility of inevitable cost increases, according to AFP.
According to the earnings report, Apple's $95.4 billion in revenue in the most recent quarter was driven by iPhone sales. Apple earned $17 billion in the Chinese market and Apple's first-quarter profit was $24.8 billion, according to AFP.
Source: Thanh Nien Newspaper
