Apple CEO Tim Cook announced during the company’s fiscal second-quarter earnings call that it expects a $900 million cost impact in the June quarter due to tariffs imposed on Chinese imports. The tech giant will now be producing iPhones sold in the US in India, and iPads, Macs, Apple Watches, and AirPods in Vietnam.
The move comes as mounting tariffs on Chinese imports affect Apple’s supply chain. Cook stated that most of the company’s tariff exposure relates to a 20% tariff rate applied to imports from China. However, the impact will be minimal for Apple’s main product lines, including iPhones, Macs, and iPads.
Despite this, Apple is bracing for changes due to global tariff rates, policies, and applications. The company projects revenue growth in the low-to-mid-single-digit range for the June quarter, with a gross margin between 45.5% and 46.5%. Apple’s fiscal second-quarter revenue surpassed Wall Street expectations of $94.53 billion at $95.36 billion.
The announcement follows concerns raised by Senator Elizabeth Warren about Cook’s role in seeking tariff exemptions for Apple products. If implemented, tariffs could have significantly impacted Apple’s supply chain and profit margins, with iPhones potentially costing up to $3,500 more than their current price.
Source: https://finance.yahoo.com/news/apple-ceo-tim-cook-warns-203752210.html