World War Fee The USA’s evolving tariff policy wasn’t all bad news for Apple, which manufactures most of its products overseas.
Speaking to the media, CEO Tim Cook said Apple revenue grew 9.6 percent in its third quarter and that one percentage point of that growth came from customers who hurried to buy hardware before tariffs increased prices. Those early shoppers spent around $825 million.
CFO Kevan Parekh confirmed this figure during the earnings call on Thursday. Cook added that the bulk of the buying was from US buyers and occurred in April – the first month of Apple’s Q3.
That extra spending offset Apple’s tariffs costs, which Parekh said reached $800 million for quarter. “However, tariffs will add $1.1 billion to our costs in the next quarter,” he added.”
“Keep in mind that the vast majority of our products are covered under the Section 232 Investigation and the bulk of the tariffs we pay are from products from China,” Cook added. “The majority of phones sold in the US come from India, and the vast majority of laptops and other hardware being sold in the US comes from Vietnam.”
Apple’s shift to Indian production might not be so helpful, since President Trump has promised a 25 percent tariff on goods coming into the US from India. Nevertheless, India’s electronics manufacturing industry has advanced rapidly to become the largest source of mobile phones purchased in the US.
Cook also touted Apple’s efforts to manufacture in the USA, albeit in a limited way. Next month the business will open its Manufacturing Academy in Detroit, Cook said, as part of a pinky-promise to invest $500 billion in America over the next four years.
The Detroit facility, run in conjunction with Michigan State University, will run classes teaching businesses how to improve manufacturing techniques and integrate AI into their operations. It’ll also offer virtual courses in programming and project management.
Apple is also looking to harden up its supply chain – something of a Cook specialty. Earlier this month, Apple signed a $500 million deal with MP Materials, operator of America’s only rare earth mine, to source magnets for its iThings. Cook & Co will build a recycling center for MP Materials in exchange for access to the materials it will produce.
Overall the financial figures [PDF] from Apple this quarter were fairly promising. Revenue rose 10 percent to $94 billion. Profits rose by nine percent for the quarter to $23.4 billion, or around $260 million a day. Revenue increased in every region Apple measures, and all its products save the iPad saw increased sales. ®
