Apple overcomes Trump's trade war, slow start in AI to deliver
surprisingly strong quarter
[August 01, 2025] By
MICHAEL LIEDTKE
SAN FRANCISCO (AP) — Apple shook off a thicket of tariffs and a botched
entry into artificial intelligence to accelerate its revenue growth
during its springtime quarter, but the trendsetting tech company still
faces a bumpy road ahead that could lead to higher iPhone prices.
The April-June results released Thursday came against a backdrop of
adversity that has been raising worries about the trajectory of a
longtime tech kingpin that expects to absorb a setback of nearly $2
billion from the tariffs that President Donald Trump has already imposed
and others in the pipeline.
Despite the doubts, Apple remains a moneymaking machine.
The Cupertino, California, company earned $23.4 billion, or $1.57 per
share, during its fiscal third quarter, a 9% increase from the same time
last year. Revenue climbed 10% from a year ago to $94 billion. The
company’s iPhone sales surged 13% from a year ago to $44.6 billion. In
another positive development, Apple's business in China showed signs of
snapping out of a prolonged malaise with a 4% bump in revenue from the
same time last year.
All those numbers were well above the analyst projections that steer
investors, helping to boost Apple’s recently slumping stock price by
about 3% in extended trading. But the unexpectedly solid performance
doesn’t necessarily mean it’s smooth sailing ahead for Apple.
Tallying the toll of Trump's tariffs
Trump’s trade war targeting foreign-made products such as the iPhone and
Apple’s stumbling start in the pivotal transition to AI is causing
investors to question if the company will remain at the tech forefront
as the industry moves into a new era.
Before Thursday’s report came out, Apple’s stock price had plunged by
17% so far this year to wipe out more than $600 billion in shareholder
wealth and knock the company off its perch as the world’s most valuable
company. Meanwhile, the shares of AI chipmaker Nvidia have surged 32%
this year and the shares of AI pacesetter Microsoft have gained 27%,
propelling the market value to $4 trillion.
Even though Apple remains highly profitable, the tariffs that Trump has
already imposed on China and other countries cost the company $800
million during the past quarter, and CEO Tim Cook told analysts during a
conference call that the fees would exact an additional toll of $1.1
billion during the July-September period. The company also predicted its
revenue for July-September period would increase at a slightly slower
pace than the past quarter.
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An Apple store employee stands inside the store in New York on Feb.
5, 2021. (AP Photo/Mark Lennihan, File )
 Cook indicated the financial damage
from the tariffs could have been much higher, telling analysts most
of the components in iPhones and other Apple products are still
shielded by temporary exemptions that the Trump administration
granted most electronics in mid-April.
Sizing up how Apple and consumers are reacting to the trade war
Apple softened the blow of Trump’s tariffs on products made outside
the U.S. during the past quarter by shifting its production of
iPhones from China to India. But the administration intends to
impose a 25% tariff on goods from India, a move that could intensify
the pressure on Apple to raise the prices on the next generation of
iPhones expected to be released in September. Cook wasn't asked
about the possibility of an iPhone increase during his Thursday
remarks to analysts.
Consumer fears about the tariffs driving up iPhone prices spurred an
unusual buying spree of iPhones and Mac computers in the U.S. during
early April, according to Cook. Apple estimated that spike accounted
for roughly one percentage point of its 10% revenue increase in the
past quarter, which translates into about $82 million in sales. Cook
also credited an uptick in consumers upgrading to the latest model
for helping Apple sell its 3 billionth iPhone since the device's
2007 debut.
Trump has been pressuring Apple to make all its iPhones in the U.S.,
a move that analysts believe would take years to pull off and
ultimately double or triple the roughly $1,000 average price of the
device. But Cook told analysts Thursday that the company is pushing
to increase its computer chip production in the U.S. as one way of
avoiding tariffs. “We ultimately will do more in the United States,”
he said.
The AI challenges still ahead
Meanwhile, Apple is still trying to fulfill the AI promises it made
last year when it unveiled an array of new iPhone features built on
the revolutionary technology, raising expectations that the shift
would spur millions of people to upgrade their old devices. But
Apple still hasn’t delivered on an AI upgrade that was supposed to
smarten up its often-bumbling virtual assistant Siri, one of the
main reasons underlying the lackluster growth of iPhone sales.
“While these numbers certainly buy Apple time, the fact is that
investors — and consumers — remain laser-focused on AI innovation.
And Apple still has a long way to go in this game,” said
Investing.com analyst Thomas Monteiro.
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