He stressed that U.S. tariffs had a significant impact on iPhone Makers’ supply chains without completely making China fully ironed out tax rates, and he answered Erik Woodring, managing director of US Technology Hardware Stocks at Morgan Stanley, on a call from Apple’s post-graduate analysts in April after the season.
“The current tax applicable to Apple today is based on the country of origin of the product. In the June quarter, we expect most iPhones sold in the United States to take India as their country of origin, while Vietnam will become the country of origin for almost all iPads, MacBooks, Apple, Apple Watches and Airpods and Airpods and Airpods.
His statement highlights Apple's long-standing diversification of supply chains, which, at the time of writing, is the most valuable company in the world at a price of $3.2 trillion.
On Thursday, the company reported revenue of $95.4 billion in March, up 5% and more year-on-year by analysts. However, the stock was beaten in after-sales deals in the U.S., with tariff issues and weaker global tips down 3.8%.
Cook said that due to the impact of Trump's International Emergency Economic Powers Act (IEPA), net tariffs on imported parts from China will be 145% in 2025, plus a 20% import tax on blankets in other geographical locations, raising Apple's cost by $900 million in the June quarter alone.
“The vast majority of our products are currently exempt from global reciprocity tariffs announced in April, as the Department of Commerce has conducted a Section 232 investigation into semiconductors, semiconductor manufacturing equipment and downstream products containing semiconductors,” Cook clarified. ”
Trade war shock
However, analysts are very cautious about the huge impact of Trump's tariff-led trade war that could have for a long time.
“The beginning of the stability around the policy and business environment will expose companies like Apple to the uncertainty that will long face cost impacts. This quarterly uncertainty is bad for investors and creates a volatility phase in the market,” a senior analyst at a global senior brokerage firm told Global Senior Analysts. Mint Under anonymity, their official notes on Apple's latest quarterly earnings were not released until the press time.
However, the shift toward India's manufacturing industry will reassure the domestic electronics market. April 26 Mint Apple is reportedly going to increase the country's iPhone manufacturing industry to more than 50 million units over the next three calendar years (more than twice the existing production).
Cook further stressed that the three months to March 31 were quarterly revenue records for the Indian market, and the company is opening “new retail stores that will start in India from later this year.”
Opportunities in India
Therefore, in the long run, India seems to play a role in the long run of the Apple ecosystem, thus bringing significant improvements to the domestic market and long-term customers.
“The only issue here is uncertainty—if Trump goes back on China tariffs by agreeing to a trade deal, that would give Apple fewer reasons to diversify its supply chain. However, given that it is already using India as an export hub during this quarter, the company's India assembly expansion plan is on course. In a way, over the next three to five years, this gives India the potential to cater to making and exporting up to 100 million iPhones,” said Navkendar Singh, associate vice-chair of Market Research Corporation of India International Data Corporation (IDC).
Tata Electronics, the contract manufacturing arm of India's largest multi-industrial conglomerate, is expected to be the biggest beneficiary of Apple's push. Mint April 26 reported that the company is increasing its annual ability to make iPhones and Apple is expected to increase production in India.
However, Cook has no quarterly forecast for how it affects its long-term costs.
However, China is not Apple's supply chain. Cook confirmed that Apple is taking advantage of China's demand for its equipment while increasing parts purchases from U.S. suppliers. TSMC, the world's largest Taiwanese chip maker, is also part of the program, with its factory in Arizona, U.S., which will cater to Apple in the near future.
