Big Win For Trump Tarfiss: Apple Moving Most Of Its USA-Bound Shipments Out Of China
Wall Street Journal
By Rolfe Winkler
Updated May 1, 2025 6:43 pm ET
Apple said a majority of its devices shipped into the U.S. in the June quarter will originate in India and Vietnam, a move to allay investor concerns about the impact of tariffs on its operations.
The company was among the hardest-hit of the tech giants last month because of its exposure to China, a primary target of the Trump administration’s global tariff pressure. Most of Apple’s devices are assembled in the country, and investors are closely watching its efforts to shift final assembly of devices bound for the U.S. to India and other countries.
Shares in Apple fell about 4% in after-hours trading. Chief Executive Tim Cook said the impact in the June quarter from tariffs, assuming existing policies remain in place, would add $900 million to Apple’s costs, a figure he suggested could be worse in future quarters. He also said that there was limited impact from tariffs in March.
Apple reported that sales rose in the January-to-March period, driven in part by higher iPhone demand and the release of the low-end 16e model. Overall, sales increased 5% to $95 billion, beating analyst expectations. Net income for the period was $24.8 billion, up nearly 5% from the January-to-March quarter last year. IPhone sales rose 2% in the period.
Cook said during a call with analysts that a “majority” of iPhones sold in the U.S. during the June quarter would come from India, while “nearly all” of the company’s other devices sold in the U.S. during the period would come from Vietnam. The devices include iPads, Macs, the Apple Watch and AirPods.
He added that Apple would continue to diversify its supply chain away from China. “What we learned some time ago was that having everything in one location had too much risk with it,” he said.
The company’s shares have recovered much of the value they lost after President Trump’s Liberation Day tariffs sent them spiraling, thanks to a pause on so-called reciprocal tariffs for smartphones. The administration continues to weigh other actions that could affect tech companies, and the company faces 20% duties on imports from China and 10% from those sent via India.
Shareholders and analysts have been waiting for Apple to publicly clarify the extent to which it would be able to shift its manufacturing away from China as the tariff battle continues to loom over its performance.
Cook has looked increasingly to India as a manufacturing partner. Analysts have estimated that redirecting the entire output of India iPhone production—about 25 million phones—would allow Apple to meet about 50% of American demand.
A levy of about 50% on Chinese goods could add roughly $300 to $500 to the hardware costs of an iPhone 16 Pro, according to TechInsights.
Apple has spent decades helping to build China into a manufacturing powerhouse, creating enormous assembly lines and factories that house an army of skilled workers that assemble its devices.
Sales of the company’s hero product, the iPhone, have stagnated in part because customers in the China region have shifted recently to local brands, causing sales there to fall. The trend could continue as U.S. brands lose their allure amid a protracted trade war. IPhone revenue makes up about half of Apple’s sales.
China sales fell more than 2% in the quarter, a trend that has been fairly consistent in recent years.
A quarter of the company’s operating profit comes from royalties Google pays to be the default search engine in Apple’s Safari web browser, according to estimates from analyst Craig Moffett of MoffettNathanson. Those payments of as much as $20 billion annually could disappear in the near future after a federal judge declared them illegal on antitrust grounds.
The market also shrugged off Wednesday’s news that a different federal judge hammered Apple about its App Store policies. Remedies she demanded could hit another high-margin revenue stream if developers en masse persuade customers to buy apps directly. The court order could prove to be a distraction, as the judge took the extraordinary step of referring the matter for a criminal-contempt investigation because of Apple’s conduct.
Apple is not only looking to refresh its product lines, it is also trying to catch up in artificial intelligence, after making promises to deliver new AI capabilities to its devices that have been delayed repeatedly.
On the earnings call, Cook said the company needs more time to deliver personalized AI features for its Siri assistant that meet the company’s quality standards.
By Rolfe Winkler
Updated May 1, 2025 6:43 pm ET
Apple said a majority of its devices shipped into the U.S. in the June quarter will originate in India and Vietnam, a move to allay investor concerns about the impact of tariffs on its operations.
The company was among the hardest-hit of the tech giants last month because of its exposure to China, a primary target of the Trump administration’s global tariff pressure. Most of Apple’s devices are assembled in the country, and investors are closely watching its efforts to shift final assembly of devices bound for the U.S. to India and other countries.
Shares in Apple fell about 4% in after-hours trading. Chief Executive Tim Cook said the impact in the June quarter from tariffs, assuming existing policies remain in place, would add $900 million to Apple’s costs, a figure he suggested could be worse in future quarters. He also said that there was limited impact from tariffs in March.
Apple reported that sales rose in the January-to-March period, driven in part by higher iPhone demand and the release of the low-end 16e model. Overall, sales increased 5% to $95 billion, beating analyst expectations. Net income for the period was $24.8 billion, up nearly 5% from the January-to-March quarter last year. IPhone sales rose 2% in the period.
Cook said during a call with analysts that a “majority” of iPhones sold in the U.S. during the June quarter would come from India, while “nearly all” of the company’s other devices sold in the U.S. during the period would come from Vietnam. The devices include iPads, Macs, the Apple Watch and AirPods.
He added that Apple would continue to diversify its supply chain away from China. “What we learned some time ago was that having everything in one location had too much risk with it,” he said.
The company’s shares have recovered much of the value they lost after President Trump’s Liberation Day tariffs sent them spiraling, thanks to a pause on so-called reciprocal tariffs for smartphones. The administration continues to weigh other actions that could affect tech companies, and the company faces 20% duties on imports from China and 10% from those sent via India.
Shareholders and analysts have been waiting for Apple to publicly clarify the extent to which it would be able to shift its manufacturing away from China as the tariff battle continues to loom over its performance.
Cook has looked increasingly to India as a manufacturing partner. Analysts have estimated that redirecting the entire output of India iPhone production—about 25 million phones—would allow Apple to meet about 50% of American demand.
A levy of about 50% on Chinese goods could add roughly $300 to $500 to the hardware costs of an iPhone 16 Pro, according to TechInsights.
Apple has spent decades helping to build China into a manufacturing powerhouse, creating enormous assembly lines and factories that house an army of skilled workers that assemble its devices.
Sales of the company’s hero product, the iPhone, have stagnated in part because customers in the China region have shifted recently to local brands, causing sales there to fall. The trend could continue as U.S. brands lose their allure amid a protracted trade war. IPhone revenue makes up about half of Apple’s sales.
China sales fell more than 2% in the quarter, a trend that has been fairly consistent in recent years.
A quarter of the company’s operating profit comes from royalties Google pays to be the default search engine in Apple’s Safari web browser, according to estimates from analyst Craig Moffett of MoffettNathanson. Those payments of as much as $20 billion annually could disappear in the near future after a federal judge declared them illegal on antitrust grounds.
The market also shrugged off Wednesday’s news that a different federal judge hammered Apple about its App Store policies. Remedies she demanded could hit another high-margin revenue stream if developers en masse persuade customers to buy apps directly. The court order could prove to be a distraction, as the judge took the extraordinary step of referring the matter for a criminal-contempt investigation because of Apple’s conduct.
Apple is not only looking to refresh its product lines, it is also trying to catch up in artificial intelligence, after making promises to deliver new AI capabilities to its devices that have been delayed repeatedly.
On the earnings call, Cook said the company needs more time to deliver personalized AI features for its Siri assistant that meet the company’s quality standards.
