Apple recently announced stronger-than-expected earnings for the first three months of 2025, reporting revenue of $95.4 billion. Of that, iPhone sales accounted for $46.84 billion, while services contributed $26.65 billion.

In his first remarks on the impact of tariffs, Tim Cook noted that the effect on Apple’s operations was limited in Q1, thanks to supply chain optimization. However, the company expects to incur an additional $900 million in costs this quarter - assuming no new tariffs or significant changes arise.

TechInsights analysts estimate that a 50% tariff on Chinese imports could raise the cost of producing the iPhone 16 Pro by $300 to $500 per unit.

“I don’t want to predict the future because I don’t know what’s going to happen with tariffs,” said Cook. “It’s very difficult to forecast anything beyond June.”

Speaking to CNBC, the Apple chief shared that currently, half of the iPhones sold in the US are imported from India. Most iPhones sold in the US during Q2 will originate from the South Asian nation, while almost all other devices - including iPads, Macs, Apple Watches, and AirPods - are manufactured in Vietnam. Devices made in China will continue to serve the rest of the global market.

Cook affirmed that Apple will continue diversifying its supply chain beyond China. “What we’ve learned in the past is that putting everything in one location is too risky,” he admitted.

Apple spent decades building a massive production hub in China, establishing extensive assembly lines and factories capable of accommodating a vast skilled labor force. However, recent geopolitical shifts have elevated India’s role in Apple’s strategy. Experts estimate that if Apple imports its entire Indian-made iPhone output (around 25 million units annually), it could meet about 50% of US consumer demand.

Apple’s revenue in Greater China, including mainland China, Taiwan, and Hong Kong, declined slightly. Meanwhile, sales in the US - its largest market - increased by nearly 8% due to pre-tariff purchasing demand.

CEO Cook also addressed the delay in releasing certain AI features, explaining that more time was needed to ensure they meet Apple’s high standards.

Du Lam

(WSJ, CNBC)