Apple execs address concerns about possible effects of Trump’s ever-changing tariff strategy
In a conference call with members of the press and the financial community, Apple CFO Kevin Parekh addressed concerns about the company’s financial prospects considering President Trump’s ever-changing tariff strategy.
He said that, for the June quarter, the June quarter, it’s impossible 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,” Parekh said. “This estimate should not be used to make projections for future quarters, as there are certain unique factors that benefit the June quarter.”
Apple makes about three-quarters of its revenue from iPhones, Macs and iPads that have mostly been made in China, the nation hit the hardest so far by import taxes. Trump has announced major tariffs for every country around the world then paused them for 90-days to pursue separate trade deals with each.
In an earlier interview, Cook told CNBC that Apple’s reliance on China for its US products is less than most pundits think. He said that Apple is already sourcing about half of the iPhones for the U.S. from India, and most of its other products for the U.S. from Vietnam, where tariffs are lower than they are from China. Apple still makes the “vast majority” of its products for other countries from China, Cook told CNBC.
Other points of interest from Apple’s conference call:
° Apple will incur a $900 million cost from tariffs this quarter. The company is absorbing that cost rather than passing it on to consumers (for now).
° Half of iPhones are coming from India this quarter, but most other products will come from Vietnam.
° The installed base of Mac users grew to an all time high, with growth for both upgraders and customers new to the Mac.
° More than half of iPad purchasers are new to the tablet.
° Apple Pay active users reached an all-time record, up double digits year over year.
° Apple TV+ set a record for viewership in the quarter.
° Two retail stores were opened in the quarter, with a new store in the UAE and India coming during this quarter.
“If you look at the U.S., over half of the U.S. sales of iPhone come from India,” Cook said. “If you look at the other products, Mac and iPad and AirPods and the Watch, almost all of the country of origin is Vietnam.”
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