US tariff fears create surge in iPhone sales

Cupertino expects additional $900m in costs to bite later this year

Trade

iPhone 16e. Image: Apple

Apple has once again posted impressive results in the third quarter of its fiscal year. The tech giant reported total revenue of $94.04 billion, with the iPhone and the services division emerging as the main growth drivers. Net profit amounted to $23.4 billion.

iPhone sales rose by no less than 13.5% to $44.58 billion, partly because American consumers made early purchases in anticipation of possible import tariffs.

The services category, which includes the App Store, Apple Music, and iCloud, also saw strong growth of 13% to $27.42 billion. Mac sales brought in over $8 billion, iPads $6.58 billion, while wearables, home & accessories $7.40 billion (slightly below expectations).

Apple expects to incur an additional $900 million in costs due to tariffs. The company continues to invest heavily in artificial intelligence, with more than $8.8 billion spent on R&D this quarter.

Apple now produces most iPhones destined for the US market in India instead of China, in response to higher import tariffs from China. By adjusting its supply chain, Apple is reducing the impact of US tariffs on products made in China.

India now accounts for more than a fifth of global iPhone production and has overtaken China as the main export country to the United States.

Apple aims to have around 50% of global iPhone production take place in India within a few years. Ideally, this should even run in sync with production in China: starting with the iPhone 17 launch, Apple wants to be able to assemble in both countries simultaneously.

In the meantime, Apple has implemented significant changes to its App Store policy and pricing structure, and according to insiders, these are likely to be approved by EU antitrust authorities. This could allow Apple to avoid hefty daily fines.

In April, Apple was fined €500 million for restricting developers from directing users to alternative payment options outside the App Store, which was in violation of the Digital Markets Act (DMA).

To comply with regulations, Apple has adjusted its App Store rules: Developers now pay a 20% processing fee for purchases within the App Store, but only 13% if they participate in the Apple Small Business Program. If developers direct users to payment options outside the App Store, a fee between 5-15% applies. Developers are now allowed to offer unlimited links to external payment systems.

All eyes are now on the September hardware event, when Apple will launch the iPhone 17. According to rumors, the iPhone 17 will be slightly slimmer, with thinner screen bezels and a lighter casing that should feel more comfortable in the hand. The design is expected to remain largely the same, but insiders anticipate improvements in brightness and color reproduction. For the first time, a super-thin iPhone Air is also expected.

Emerce

Read More: Apple Results