San Francisco: Apple says he could lose $ 900 million this quarter due to the American trade rates announced by US President Donald Trump, although the technology giant said the benefit in the first quarter on Thursday.
The technology giant warned that the cost increase was linked to the movement of its iPhone production from China to India. The CEO, Tim Cook said that most of the iPhones sold in the United States will soon be made in India, but this decision is accompanied by higher expenses due to trade tensions.
Cook said on a call for results, which he expected to expect “a majority of iPhones sold in the United States will have India as a country of origin”, adding that Apple’s products were exempt from Trump’s most serious reciprocal rates for the moment.
“We are unable to estimate the impact of prices precisely, because we are not sure of the potential future actions before the end of the quarter,” said Cook.
“Assuming that current global rates, policies and applications do not change for the quarter balance and no new price is added, we estimate the impact to add $ 900 million to our costs.”
Tit-form exchanges have seen heavy American samples imposed on China, with Beijing fixing reprisals for American imports.
High-end technological products such as smartphones, semiconductors and computers have received a temporary reproductive from American prices.
“Apple has accumulated stocks before planned pricing policies,” said Xuan Chiew, Director of Canalys research. “With continuous fluctuations in reciprocal tariff policies, Apple should still move the production linked to the United States in India to reduce exposure to future risks.”
While iPhones produced in continental China still explain the majority of American expeditions, production in India has increased towards the end of the quarter, according to Canalys.
Cook said Vietnam would be the country of origin for almost all iPad, Mac, Apple Watch and Airpod products sold in the United States.
China will continue to be where most Apple products are made for sale outside the United States, he insisted.
Apple’s turnover of $ 95.4 billion in the recently finished quarter was motivated by iPhone sales, the company taking $ 17 billion on the Chinese market, according to the results report. The benefit for the quarter was 24.8 billion dollars.
Apple shares have slipped more than 3% in trading after the market.
“The real story is in Tim Cook’s plans to sail in these unprecedented commercial challenges,” said analyst Emarketer Jacob Bourne.
The Apple plan to move manufacturing in India “raises urgent questions about the chronology of execution, capacity limitations and potentially inevitable cost increases that will reduce margins, will be transmitted to consumers or will have a mixture of consequences,” added Bourne.