Increased tariffs cost Apple $900 million last quarter, the company said when it announced solid first quarter results.
While almost a $1 billion in extra fees paid to the government is nothing to sneeze at, Apple is so enormous that one analyst on the quarterly earnings call described the hit as surprisingly low.
Apple reported first quarter revenue of $95.4 billion. And even with the tariff payment, it still reported earnings per share profit of $1.65, a first-quarter record, it said.
The big question on the minds of tech users — as well as many tech startups that prefers to outfit employees with Macs — is if Cook foresees ongoing tariffs increasing Apple’s prices.
At least as far as the next quarter is concerned, this is unlikely. When asked outright about tariff-induced price increases, Cook said he had “nothing to announce at this time.”
He explained that Apple is now importing a larger portion of its iPhones from India, rather than China, keeping the tariff hit reduced. As for Macs, a bigger portion of those are coming from Vietnam, he said. The devices produced in China are largely being sent to Apple’s customers outside the U.S., he added.
The biggest hit in tariff costs for Apple, he said, was with the AppleCare and the accessories businesses — aka spare parts to fix a broken device covered under its warranty program, and things like iPhone cases. For those businesses, the tariff rate hit “at least 145%,” he said.
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He didn’t imply that costs would be increased to cover that hit, yet, either.
But he did explain that Apple hasn’t been hit as hard as it could have been. That was largely because its products “including iPhone, Mac, iPad, Apple Watch and Vision Pro” aren’t currently subject “to global reciprocal tariffs” while the Commerce Department conducts an investigation into how tariffs affect imports of semiconductors and the products that use them.
So should consumers and startups buy their Macs now rather the later? Cook says Apple is doing what it can to keep costs in check, including influencing the tariff policy itself.
“Obviously, we’re very engaged on the tariff discussions. We believe in engagement and will continue to engage. On the pricing piece, we have nothing to announce today,” Cook said.
