Tim Cook: 'The majority of iPads, Macs, and Apple Watches entering the US will be imported from Vietnam'

To circumvent tariffs, the majority of Apple's imports into the US in the second quarter will come from India and Vietnam.

During the earnings report on May 1st, CEO Tim Cook stated that the majority of Apple devices shipped to the US in the second quarter would be assembled in India and Vietnam. This move was intended to alleviate concerns about the impact of tariffs on Apple's business operations.

According to the WSJ , Apple was one of the tech companies most heavily impacted when US President Donald Trump announced tariffs in early April, largely because its production lines depend on China.

Investors are closely watching Apple's efforts to move assembly operations to India and other countries, at least for devices sold in the US.

A mix of sadness and joy.

In trading that ended on May 1st (local time), Apple shares fell by approximately 4%. CEO Tim Cook stated that assuming tariff policies remain unchanged, the company would record a $900 million increase in second-quarter expenses, and potentially even higher in subsequent quarters.

"We estimate the impact will result in an additional cost of $900 million . This figure should not be used to calculate revenue forecasts for the following quarters, as several favorable factors will occur during the quarter," Bloomberg quoted Cook as saying.

Overall, Apple's first-quarter revenue increased 5% to $95.36 billion , partly due to strong iPhone demand following the launch of the iPhone 16e and growth in its apps and services business. Net profit for the period reached $24.78 billion , up 4.8% year-on-year.

The iPhone 16 lineup is on display in an Apple store. Photo: Reuters .

According to the New York Times , these results exceeded Wall Street analysts' expectations (profit of $24.37 billion , revenue of $94.35 billion ). Apple estimated a slight increase in second-quarter revenue.

Apple's stock is recovering after a sharp decline in early April. However, the US government is still considering actions that could impact the technology sector. This could lead to Apple facing a 20% tariff on goods imported from China, and a 10% tariff on goods imported from India.

“We will manage the company the way we always do, making decisions thoughtfully and cautiously. Looking ahead, we remain confident,” Cook said.

In the first quarter, iPhone sales, Apple's most important business segment, increased 2% to $46.84 billion . According to market research firm Counterpoint Research , iPhone sales increased by more than 10% in many markets such as Japan, India, and the Middle East, helping the company rise to the number one position in global smartphone market share in the first quarter.

Efforts to diversify the supply chain

According to Tim Cook, “the vast majority” of iPhones sold in the US in the second quarter will come from India, while “almost all” other devices, including iPads, Macs, Apple Watches, and AirPods, will be imported from Vietnam.

"Our long-term experience shows that concentrating all operations in one location carries too much risk," Cook emphasized, stressing the need to continue diversifying our supply chain.

Overall, shareholders and analysts are still awaiting specific information on plans to move manufacturing operations out of China, especially since the tariff deferral period only lasts 90 days.

On Apple's side, Tim Cook emphasized the importance of India. Analysts suggest that if Apple imported all iPhones currently manufactured in India (approximately 25 million units), it could meet about 50% of the demand from US users.

An advertisement for the iPhone 16e at an Apple store. Photo: Bloomberg .

TechInsights, an analytics firm, assumes that if tariffs on Chinese goods reach around 50%, the hardware cost of the iPhone 16 Pro could increase by $300-$500 .

Apple has spent decades building its supply chain in China, including assembly lines, factories, and a skilled workforce.

However, Apple's retail operations in China are facing difficulties as consumers switch to domestically produced smartphones.

This trend could continue as American brands lose appeal to Chinese consumers amid the ongoing trade war. In the first quarter, Apple's sales in China fell by more than 2%, the only region to experience negative growth.

Meanwhile, the services business, which includes apps, Apple Music, and Apple Pay, generated $26.65 billion in revenue, an 11.6% increase year-on-year.

Challenges from many sides

Apple's stable business results have come amidst a turbulent market. The company has faced challenges such as Apple Intelligence not meeting expectations, and Trump's tariffs impacting production.

Wall Street analysts predict the iPhone could increase in price from $1,000 to $1,600 . Some customers are rushing to buy iPhones before the price increase, which is expected to contribute to iPhone sales in the second quarter (ending in June).

According to analyst Craig Moffett from MoffettNathanson, about a quarter of Apple's operating profit comes from royalties paid by Google, used to set Google Search as the default search engine on the Safari browser.

However, the $20 billion per year could disappear if a judge rules that Google violated antitrust laws.

Inside an Apple store in Shanghai, China. Photo: Bloomberg .

Although not widely publicized, another judge criticized Apple on May 1st regarding its App Store policy, alongside a proposed measure. If approved, this would allow developers to more easily redirect users to payment gateways outside the App Store. This could potentially impact the currently thriving services segment.

Apple is not only refreshing its product line but also wants to expand its competition in the AI ​​field, although the first steps are still fraught with difficulties.

Last year, Apple launched an AI system capable of summarizing notifications, writing emails, and upgrading the Siri assistant. However, in March of this year, Apple representatives confirmed they were unable to release a new version of Siri as scheduled.

During the earnings report, Cook stated that Apple needed more time to refine the new version of Siri to meet quality standards.

"We needed more time to complete the work in order to meet the company's high quality standards. Although it took longer than planned, we are doing well," Cook emphasized.

Source: https://znews.vn/apple-tang-nhap-khau-thiet-bi-tu-an-do-viet-nam-post1550413.html