Apple Expects $900 Million Hit from Tariffs in Fiscal Q3

Apple CEO Tim Cook expects that the US tariffs in its current fiscal quarter will add an estimated $900 million in costs if the conditions do not change. Most of the tariffs did not start until April, so did not have a significant impact on Apple’s fiscal Q2 performance.

Cook explained the estimate of $900 million is based on current global tariff rates, policies, and applications remaining unchanged for the balance of the fiscal quarter. However, he stated the company is unable to precisely forecast trends in the current fiscal quarter because they are uncertain of potential future actions. The CEO said Apple had a limited impact from tariffs as they were able to optimize supply chain and inventory in Q2.

Cook said for the current fiscal quarter, Apple expects most iPhones sold in the US would originate in India. Vietnam will be the country of origin for almost all iPads, Mac, Apple Watch and AirPods sold in the US. Those efforts will help minimize the impact of the 145% tariffs on goods from China. Cook stated China would continue to be the country of origin for the vast majority of total product sales outside the US.

For the third fiscal quarter of 2025, Apple posted revenue of $95.4 billion, up 5% on the comparable period of fiscal 2024. Net income increased from $23.6 billion to $24.7 billion. The services business segment generated a quarterly record of $26.6 billion in sales, up 11.8%. Revenue for iPhone was $46.8 billion, up 2%, while Mac revenue increased 7% to $7.9 billion. iPad revenue rose 15% to $6.4 billion, and wearables dropped 5% to $7.5 billion. Net sales in China decreased by 2% to $16 billion, with increases in the Americas, Japan, Europe, and the rest of Asia Pacific.

Cook said the iPhone uses a lot of chips made domestically, and Apple is buying 19 billion chips across 12 US states this year. “As we look ahead, we remain confident that we will continue to build the world’s best products and services, confident in our ability to innovate and enrich our users’ lives, and confident that we can continue to run our business in a way that has always set Apple apart,” added Cook.