UK iPhones will continue to be made in China, Apple confirmed today in its first-quarter report.
CEO Tim Cook (abve) said Apple expects most iPhones sold in the US to be manufactured in India, while production of iPads, Macs, Apple Watches and AirPods will largely shift to Vietnam. This move is part of Apple’s strategy to reduce the impact of US tariffs by diversifying its supply chain away from China.
However, most Apple products sold outside the US will continue to be made in China. The tariffs affecting Apple are mainly the 20 per cent IEEPA-related US duties on Chinese imports.
The International Emergency Economic Powers Act (IEEPA) is a US federal law that authorises the President to regulate international commerce when a national emergency is declared in response to a threat from outside the US.This law was enacted in 1977 and gives the President broad authority to control economic transactions.
Some accessories face a total tariff rate of 145 per cent due to additional levies. Most of Apple’s core products are not affected by the new global tariffs introduced in April. The company estimates a $900 million tariff impact for the quarter, assuming no changes in policy.
Apple reported a strong start to the year, with $95.4 billion in sales over the past three months, up from $90.8 billion the previous year. Profits rose to $24.8 billion, compared with $23.6 billion last year. Gross margin also increased slightly.
To reassure investors, Apple has raised its dividend to 26 cents per share (up from 25 cents) and announced a $100 billion share buyback programme to support its stock price.
“We’re reporting strong quarterly results, including double-digit growth in Services,” said CEO Tim Cook. “We were pleased to introduce the iPhone 16e, along with powerful new Macs and iPads built on Apple silicon. We’re also proud to have reduced our carbon emissions by 60 per cent over the past 10 years.”
Ben Wood, Chief Analyst at CCS Insight, commented:
“Apple delivered another strong performance, but the weakening macroeconomic situation and tariff uncertainty continue to cast a shadow over performance for the rest of the year.
“It’s little surprise that Apple has been working hard to optimise its supply chain and inventory, given the current turbulence. Previous investments in India are paying dividends, but it’s impossible to divert huge volumes away from China in the short term, given how entrenched its manufacturing and supply networks are.
“I’m surprised Apple’s CFO stated that the company has seen little ‘pull-ahead demand’ for the iPhone in light of the recent tariff turbulence. I had expected an uptick in sales as consumers tried to second-guess future price rises.”
