Apple Faces Investor Scrutiny Over Tariffs and AI Strategy Amid iPhone Sales Decline

Apple investors seek clarity on tariffs, AI strategy as iPhone sales decline

April 29 (Reuters) - Apple (AAPL.O), opens new tab is expected to face a string of questions over the delayed roll-out of key AI features and the impact of the Sino-U.S. tariff standoff on its business, when it reports results on Thursday. Even as Apple benefited from a rush of orders for its recently launched lower-priced iPhone 16e in the January-March period ahead of potential tariffs, Wall Street analysts still expect the company will report a small fall in iPhone sales. That would mark a second straight quarter of declines. The Trump administration has so far spared electronics from tariffs, but Washington has signaled that some levies could come in the coming weeks. The uncertainty has sent shares of Apple, which makes 90% of its products in China, down more than 16% this year, and wiping off over $600 billion from its market value. Apple will try to mitigate tariffs by shifting production of U.S.-bound iPhones to India, Reuters has reported. Analysts expect the company to spread some of the tariff costs through its supply chain, while keeping price increases to a minimum to avoid losing market share. "Tariffs are a sword of Damocles for Apple - dangling, disruptive and politically charged," said Eric Schiffer, chairman of Patriarch Organization, a California-based private equity firm that holds Apple shares. Unlike rivals such as Samsung (005930.KS), opens new tab and Alphabet's (GOOGL.O), opens new tab Google, Apple has also been slow to roll out some important AI features it promised last year at its developer conference. Improvements to voice assistant Siri, a common ask from users and investors, have been delayed to 2026, and Apple pulled a commercial that promoted AI functionalities that were not yet available. AI features are especially important in China, where Apple has been losing market share to domestic rivals such as Huawei. Apple has partnered with Alibaba to offer AI services in China but hasn't offered a timeline for their roll-out. IPhone shipments in China fell 9% in the March quarter, the only major smartphone maker to post a decline in the region, according to data from research firm IDC. Despite these challenges, strong demand for the $599 iPhone 16e in India helped Apple take the top spot for global smartphone sales in the quarter, according to Counterpoint Research. Apple's cautious, privacy-first approach to AI deployment has slowed its roll-out and left the company playing catch up, said Jacob Bourne, analyst at eMarketer. "With tariffs threatening cost structures, Apple faces pressure to move faster on AI innovation and supply chain realignment - both of which are capital intensive". Overall, Apple's revenue is expected to rise 4.2% in the January-March period, its fiscal second quarter, roughly matching the pace in the first quarter. Growth will likely be driven by upbeat iPad demand and growth in the services business. IPad sales are expected to rise 9.1% in the second quarter, while the services business, Apple's biggest revenue generator after the iPhone, will likely grow 11.8%. Reporting by Akash Sriram in Bengaluru; Editing by Sayantani Ghosh and Shounak Dasgupta Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology Akash Sriram Thomson Reuters Akash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections. He has a postgraduate degree in Conflict, Development, and Security from the University of Leeds. Akash's interests include music, football (soccer), and Formula 1.

Apple results good but shares down as $900m tariff costs loom

While Apple reported decent quarterly results, its shares dropped as concerns on tariffs, court rulings and AI progress dominated. Apple reported good results last night after markets closed, with quarterly revenue of $95.4bn, up 5pc year on year, and quarterly diluted earnings per share of $1.65, up 8pc year on year, with services seeing strong progress. However, the US tariffs threat saw the iPhone giant budget an extra $900m costs minimum for next quarter. As a result share prices dipped by over 4pc last night, after a week that saw other tech shares like Meta and Microsoft regain some lost ground in the markets. "Today Apple is reporting strong quarterly results, including double-digit growth in Services," said Tim Cook, Apple's CEO. "We were happy to welcome iPhone 16e to our lineup, and to introduce powerful new Macs and iPads that take advantage of the extraordinary capabilities of Apple silicon." Services came in very much in line with estimates. Services include the App Store and Apple TV+, and they saw growth of 12pc to $26.7bn in the quarter. However Apple's App Store revenues could also be under threat, given the Epic ruling yesterday that saw it being ordered to open its App Store fully to third party payments. In a sign of Apple's concern over the ongoing tariff chaos, on its earning call last night Cook warned that Apple expects to add $900m in costs next quarter. Apple of course has historically manufactured the bulk of its products in China although it has been making efforts to move more manufacturing to India and Vietnam. Another ominous sign was that sales in China fell 2.3pc in the quarter, coming in below analyst expectations, as local phone competitors like Huawei and Xiaomi pick up the slack. Another challenge for Apple comes from its delay in launching its AI Intelligence offering in China, and what is perceived as problems in general with its AI offering not keeping up with competitors. "Apple's recent AI enhancements have been minimal, and the more sought-after features, like the Siri revamp, are being pushed out to 2026," said Forrester VP and principal analyst Dipanjan Chatterjee. "Apple's strong brand equity has absorbed much of this damage without customer defection, but this equity is being steadily eroded as Apple fails to make good on its AI promises. The tariff brouhaha may have distracted many Apple watchers from the AI conversation, but this intrinsic factor remains vital to Apple's success." "We will manage the company the way we always have, with thoughtful and deliberate decisions, with a focus on investing for the long term," Cook said during the call, per Bloomberg. Analysts will be keeping a close eye on those very decisions. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

Apple posts stronger-than-expected Q2 results but stocks slides after-hours

Apple's revenue for the fiscal second quarter topped Wall Street's expectations, but investors are waiting to hear what CEO Tim Cook has to say about the impact of President Donald Trump's tariffs and economic uncertainty on its business. The Cupertino, California-based company earned $24.78 billion, or $1.65 per share, in the first three months of the year, up 4.8% from $23.64 billion, or $1.53 per share, in the same period a year earlier. Revenue rose 5.1% to $95.36 billion from $90.75 billion. Analysts, on average, were expecting earnings of $1.62 per share on revenue of $94.19 billion, according to a poll by FactSet. The numbers for the January-March period provide a snapshot of how Apple was faring before President Trump's unveiling of sweeping tariffs in April that rattled the financial markets amid fears a trade war would reignite inflation and shove the U.S. economy into a recession. Apple's reliance on Chinese factories to make its iPhones and other devices thrust the technology trendsetter into the crosshairs of Trump's trade war. The exposure caused Apple's stock price to plunge 23% shortly after the president announced the severity of the reciprocal tariffs, temporarily erasing $773 billion in shareholder wealth in the process. Most of those losses have since been recovered after Trump temporarily exempted iPhones and other electronics from the reciprocal tariffs, but Apple's stock remains down by nearly 5% since the April fusillade of tariffs. Besides the trade war, Apple has been hurt by its inability to live up to its own hype surrounding artificial intelligence features on the iPhone 16 lineup that came out last fall. The technology wasn't ready when the iPhone 16 went on sale. Some AI features have rolled out in parts of the world as part of software updates, but Apple still hasn't been able to live up to its original promise to make Siri smarter and more versatile. The missteps prompted Apple to pull advertising campaigns promoting AI breakthroughs on the iPhone, although the company still intends to release more features powered by the technology at some point. Apple had been counting on its late entry into the AI craze to revive demand for the iPhone after last year's sales dipped 2% from 2023's levels. Apple said Wednesday that its phone sales climbed 1.9% to $46.84 billion for the first three months of the year. Wall Street had expected iPhone sales of $45.62 billion. When Trump initially indicated his 145% tariffs on Chinese-made goods would apply to the iPhone, U.S. consumers rushed to stores to buy new devices rather than risk prices spiking higher after the duties began driving up costs. But the flurry of panic buying won't show up until Apple reports its results for the April-June quarter this summer. Trump's trade war has ramped up the pressure on Cook to work the same diplomatic sleight of hand that enabled the iPhone to avoid being stung by the China tariffs that the president imposed during his first administration. Cook signaled his intention remain on good terms with Trump by arranging private meetings with him and personally donating $1 million to the president's second inauguration ceremony before sitting on the dais when Trump was sworn into office on January 20. Apple subsequently announced plans to invest $500 billion in the U.S. while hiring 20,000 workers during the next four years. Trump's trade war also is prompting a push to Apple to shift all the production of the iPhones that it sells in the U.S. from China to India, where the company has been building up its supply chain for the past seven years, according to a recent story in the Financial Times. But the complicated logistics of making such a huge move likely couldn't be completed until next year, at the earliest, leaving Apple vulnerable to the vagaries of Trump's trade war.

Apple Investors Seek Clarity on Tariffs, AI Strategy as IPhone Sales Decline

(Reuters) - Apple is expected to face a string of questions over the delayed roll-out of key AI features and the impact of the Sino-U.S. tariff standoff on its business, when it reports results on Thursday. Even as Apple benefited from a rush of orders for its recently launched lower-priced iPhone 16e in the January-March period ahead of potential tariffs, Wall Street analysts still expect the company will report a small fall in iPhone sales. That would mark a second straight quarter of declines. The Trump administration has so far spared electronics from tariffs, but Washington has signaled that some levies could come in the coming weeks. The uncertainty has sent shares of Apple, which makes 90% of its products in China, down more than 16% this year, and wiping off over $600 billion from its market value. Apple will try to mitigate tariffs by shifting production of U.S.-bound iPhones to India, Reuters has reported. Analysts expect the company to spread some of the tariff costs through its supply chain, while keeping price increases to a minimum to avoid losing market share. "Tariffs are a sword of Damocles for Apple - dangling, disruptive and politically charged," said Eric Schiffer, chairman of Patriarch Organization, a California-based private equity firm that holds Apple shares. Unlike rivals such as Samsung and Alphabet's Google, Apple has also been slow to roll out some important AI features it promised last year at its developer conference. Improvements to voice assistant Siri, a common ask from users and investors, have been delayed to 2026, and Apple pulled a commercial that promoted AI functionalities that were not yet available. AI features are especially important in China, where Apple has been losing market share to domestic rivals such as Huawei. Apple has partnered with Alibaba to offer AI services in China but hasn't offered a timeline for their roll-out. IPhone shipments in China fell 9% in the March quarter, the only major smartphone maker to post a decline in the region, according to data from research firm IDC. Despite these challenges, strong demand for the $599 iPhone 16e in India helped Apple take the top spot for global smartphone sales in the quarter, according to Counterpoint Research. Apple's cautious, privacy-first approach to AI deployment has slowed its roll-out and left the company playing catch up, said Jacob Bourne, analyst at eMarketer. "With tariffs threatening cost structures, Apple faces pressure to move faster on AI innovation and supply chain realignment - both of which are capital intensive". Overall, Apple's revenue is expected to rise 4.2% in the January-March period, its fiscal second quarter, roughly matching the pace in the first quarter. Growth will likely be driven by upbeat iPad demand and growth in the services business. IPad sales are expected to rise 9.1% in the second quarter, while the services business, Apple's biggest revenue generator after the iPhone, will likely grow 11.8%. (Reporting by Akash Sriram in Bengaluru; Editing by Sayantani Ghosh and Shounak Dasgupta)

Apple Faces Tariff-Related 'Sword of Damocles' Ahead of Earnings | PYMNTS.com

Apple will likely face tough questions on tariffs and AI from investors when it reports earnings this week. That's according to a report Tuesday (April 29) from Reuters, which says the tech giant's investors will want to know more about the delayed launch of Apple's artificial intelligence (AI) features, and the impact of the U.S.-China trade war on its business. "Tariffs are a sword of Damocles for Apple -- dangling, disruptive and politically charged," said Eric Schiffer, chairman of Patriarch Organization, a California-based private equity outfit that holds shares in the iPhone maker. According to Reuters, while Apple enjoyed a flurry of orders for the iPhone 16e before the tariffs were announced, Wall Street analysts are still projecting a drop in iPhone sales, the second such quarterly decline in a row. Apple is reportedly planning to offset the tariffs by sourcing all its iPhones for the U.S. market from India, with plans to get all its U.S.-bound iPhones from that country by the end of 2026 The Reuters report notes that Apple has been slower than rivals Samsung and Google at introducing new AI features. Upgrades to its voice assistant Siri are on hold until next year, while Apple has pulled an ad campaign promoting AI features that were not yet available. Apple has also faced AI hiccups in China, where it has been losing ground to domestic smartphone makers like Huawei. Earlier this year, Apple teamed with Alibaba to develop AI services for Chinese customers, but it's not clear when they will debut. Meanwhile, a recent research note from Morgan Stanley argued that consumers' perception of Apple's AI platform is more favorable than that of investors. In the research note provided to PYMNTS, the investment bank said it found that the Apple Intelligence platform has been downloaded and engaged with by 80% of eligible American iPhone owners in the past six months, has an above average net promoter score of 53, and is marked by customers as "easy to use, innovative, and something that improves their user experience." "While much of the public critique of Apple Intelligence is warranted, and investor sentiment and expectations on Apple's AI platform couldn't be lower, our survey of iPhone owners paints a more positive picture," Morgan Stanley said in the note.

Apple investors seek clarity on tariffs, AI strategy as iPhone sales decline

(Reuters) - Apple is expected to face a string of questions over the delayed roll-out of key AI features and the impact of the Sino-U.S. tariff standoff on its business, when it reports results on Thursday. Even as Apple benefited from a rush of orders for its recently launched lower-priced iPhone 16e in the January-March period ahead of potential tariffs, Wall Street analysts still expect the company will report a small fall in iPhone sales. That would mark a second straight quarter of declines. The Trump administration has so far spared electronics from tariffs, but Washington has signaled that some levies could come in the coming weeks. The uncertainty has sent shares of Apple, which makes 90% of its products in China, down more than 16% this year, and wiping off over $600 billion from its market value. Apple will try to mitigate tariffs by shifting production of U.S.-bound iPhones to India, Reuters has reported. Analysts expect the company to spread some of the tariff costs through its supply chain, while keeping price increases to a minimum to avoid losing market share. "Tariffs are a sword of Damocles for Apple - dangling, disruptive and politically charged," said Eric Schiffer, chairman of Patriarch Organization, a California-based private equity firm that holds Apple shares. Unlike rivals such as Samsung and Alphabet's Google, Apple has also been slow to roll out some important AI features it promised last year at its developer conference. Improvements to voice assistant Siri, a common ask from users and investors, have been delayed to 2026, and Apple pulled a commercial that promoted AI functionalities that were not yet available. AI features are especially important in China, where Apple has been losing market share to domestic rivals such as Huawei. Apple has partnered with Alibaba to offer AI services in China but hasn't offered a timeline for their roll-out. IPhone shipments in China fell 9% in the March quarter, the only major smartphone maker to post a decline in the region, according to data from research firm IDC. Despite these challenges, strong demand for the $599 iPhone 16e in India helped Apple take the top spot for global smartphone sales in the quarter, according to Counterpoint Research. Apple's cautious, privacy-first approach to AI deployment has slowed its roll-out and left the company playing catch up, said Jacob Bourne, analyst at eMarketer. "With tariffs threatening cost structures, Apple faces pressure to move faster on AI innovation and supply chain realignment - both of which are capital intensive". Overall, Apple's revenue is expected to rise 4.2% in the January-March period, its fiscal second quarter, roughly matching the pace in the first quarter. Growth will likely be driven by upbeat iPad demand and growth in the services business. IPad sales are expected to rise 9.1% in the second quarter, while the services business, Apple's biggest revenue generator after the iPhone, will likely grow 11.8%. (Reporting by Akash Sriram in Bengaluru; Editing by Sayantani Ghosh and Shounak Dasgupta)