On the heels of one of its most chaotic months ever, Apple kept the volatility going yesterday, beating overall expectations for the quarter but warning of a big hit potentially coming to its bottom line. President Trump’s tariffs could cost Apple $900 million next quarter, CEO Tim Cook said on a call yesterday with investors, who were champing at the bit for his commentary. Cook hadn’t spoken about tariffs since January, when he said Apple was “monitoring the situation.” Here’s the situation so far: - Apple reported its best January-to-March period in more than two years—sales grew by 5% to surpass $95 billion. Analysts thought this might have been partially driven by a rush of pre-tariff purchases, but Cook said that wasn’t the case.
- Apple’s China revenue fell almost $1 billion short of expectations, which could reflect local phone brands like Huawei gaining ground in Apple’s second-largest market. Yesterday, Cook said production of most US-bound devices will move to India and Vietnam, a tactic that won’t “go down well” in China, an analyst at Forrester previously argued.
Meanwhile, Apple is in legal trouble at home “Cook chose poorly,” and Apple’s VP of Finance Alex Roman “outright lied under oath” to gain an anti-competitive advantage, Judge Yvonne Gonzalez Rogers wrote yesterday in a scathing ruling against the iPhone-maker. TL;DR: In 2021, Rogers ordered Apple to let third-party game developers, like Fortnite’s Epic Games, direct users to their own websites for virtual transactions in order to avoid Apple’s 30% cut of in-app purchases. “Apple willfully chose not to comply with this court’s injunction,” Rogers wrote yesterday, citing a new fee Apple created to bar developers from venturing outside its App Store. Apple messed up so badly in Rogers’s eyes that she “took the extraordinary step” of suggesting that federal prosecutors investigate Apple for criminal contempt, according to the Wall Street Journal. Apple said it would comply with the court order but plans to appeal.—ML | 
