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Apple Faces Earnings Pressure Amid Tariffs and Delayed AI Strategy

  • tech360.tv
  • Jul 31
  • 2 min read

Apple is bracing for earnings pressure as it prepares to report quarterly results Thursday, with U.S. tariffs, rising competition in China, and a slow entry into artificial intelligence weighing on its outlook.


Crowded store with people examining smartphones on display tables. Bright interior, predominantly blue and white attire, lively atmosphere.
Credit: APPLE

Wall Street expects Apple to post a 4.2% increase in revenue for the April-June quarter, reaching USD 89.34 billion. However, investor focus is shifting to how the company will navigate a changing global supply chain that has become a potential liability.


U.S. President Donald Trump has criticised Apple for its dependence on overseas manufacturing and imposed a 25% tariff on goods imported from India starting Aug. 1. The move could impact Apple, which had shifted production of U.S.-bound iPhones to India to avoid earlier tariffs on Chinese-made devices.


The volume of Indian-made smartphones surged 240% in the second quarter, largely due to Apple’s supply chain shift, according to Canalys. Analysts now expect the tariff impact to be well below the USD 900 million Apple estimated in May.


D.A. Davidson analyst Gil Luria said iPhones are a high-profile product that both the U.S. and Chinese governments see as leverage in trade disputes, leaving Apple vulnerable until tariff rates are resolved.


Some analysts believe Apple may have overestimated tariff costs to create room for an earnings beat. Jamie Meyers, senior analyst at Laffer Tengler Investments, said many companies make conservative assumptions to exceed their own guidance.


Crowd gathered outside a glass storefront, some waving. Text reads "16 Pro." Reflected buildings and greenery in background. Energetic mood.
Credit: APPLE

iPhone sales are expected to have risen 2.2% in Apple’s fiscal third quarter, supported by improved demand in China, its third-largest market. In the previous quarter, iPhone sales rose 1.9%.


Counterpoint Research reported an 8% jump in iPhone sales in China during the quarter, driven by discounts during the 618 shopping festival, government-backed trade-in subsidies, and targeted promotions for the iPhone 16 Pro.


Sales of Apple’s other hardware devices are expected to have slowed during the April-June period. However, revenue from services, Apple’s fastest-growing segment, is projected to rise 10.7%, following an 11.6% increase in the previous quarter.


Despite the gains, Apple faces uncertainty in China, where local brands like Honor are launching smartphones with advanced AI features, including generative AI photo editors.


Apple’s delayed rollout of its Apple Intelligence suite and postponed AI upgrade to Siri have raised concerns that the company is missing out on a major industry growth wave.

  • Apple expected to report USD 89.34 billion in quarterly revenue, up 4.2%

  • U.S. tariffs on Indian imports may impact Apple’s supply chain strategy

  • iPhone sales in China rose 8% in Q2, aided by discounts and subsidies


Source: REUTERS


 
 
 

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