By Michael Lietke and Barbara Oattei
Apple CEO Tim Cook said Thursday that the majority of iPhones sold in the US in the current financial quarter are sourced from India, while IPads and other devices come from Vietnam as they work to avoid the impact of President Trump’s tariffs on their businesses.
Apple’s revenue for the first three months of the year has surpassed Wall Street expectations due to high demand for the iPhone, and the company said tariffs had a limited impact on second quarter results.
Cook added that, assuming things won’t change in the current quarter, Apple expects $900 million to be added to its costs as a result of tariffs.
The Cupertino, California-based company rose 4.8% from $24.78 billion in the first three months of the year, or $1.65 per share, compared to $23.64 billion ($1.53 per share) in the same period last year.
Revenues rose 5.1% from $90.75 billion to $953.6 billion.
Analysts on average expected profits of $1.62 per share against $949 billion in revenue, according to FactSet’s poll.
The January-March figures provide a snapshot of how Apple was carrying it before President Trump cleaned up, rattling financial markets amid fears that the trade war would rekindle inflation and bringing the US economy into a recession.
Apple’s reliance on Chinese factories will stab the iPhone and other devices technology trendsetters into the Trump trade war cross. The revelation caused Apple’s shares to plummet 23% shortly after the president announced the severity of mutual tariffs, temporarily erasing shareholder wealth in the process.
Most of these losses were recovered after Trump temporarily exempts iPhones and other electronic devices from mutual tariffs, but Apple’s share price has fallen nearly 5% since April’s tariff Fusillade.
In addition to the trade war, Apple was hurt by its inability to handle the hype surrounding the artificial intelligence of its iPhone 16 lineup, which was released last fall.
When the iPhone 16 was on sale, the technology was not ready. While some AI features have been rolled out across parts of the world as part of software updates, Apple has failed to meet its original promise to make Siri smarter and more versatile. Misstep has prompted Apple to promote an ad campaign to drive AI breakthroughs on the iPhone, but the company is planning to release more technology-equipped features at some point.
Apple has resorted to slow entries into the AI trend to revive demand for the iPhone after sales last year soaked 2% from the 2023 level. Apple said Wednesday that mobile phone sales rose 1.9% to $46.844 billion for the first three months of the year. Wall Street had expected iPhone sales to be $45.62 billion.
When Trump initially showed that a 145% tariff on Chinese-made goods would be applied to the iPhone, US consumers rushed to stores to buy new devices, rather than spike higher risk prices after their duties began cutting costs. However, gusts of panic purchases will not be displayed until Apple reports its results for the April-June quarter this summer.
Trump’s trade war could raise pressure on Cook and prevent him from being stabbed by the Chinese tariffs he imposed in his first administration, so that he could work with the same diplomatic hands.
Cook has shown that his intentions remain a good relationship with Trump by having made a personal donation of $1 million to the president’s second inauguration when Trump took office on January 20, and then arranged a personal meeting with him, and by giving $500 billion to the president’s second inauguration, with Apple’s plans to invest $500 billion in the US while employing 20,000 workers over the next four years.
Trump’s trade war has also urged a shift in all production of iPhones sold from China to India, according to a recent story in the Financial Times. But the complex logistics of creating such a huge move could not be completed the earliest time until next year, making Apple vulnerable to the whims of Trump’s trade war.
Apple’s shares fell by $5.81 (2.7%) to $207.51 in after-hours trading.
Original issue: May 1, 2025, 5:06pm EDT
