Apple CEO Tim Cook warned of increasing tariff costs and opened the door to a potential acquisition to boost the company’s floundering AI ambitions, as it delivered a strong set of fiscal Q3 results.

In an earnings call, Cook noted the situation around tariffs is evolving, with costs forecast to rise from $800 million in fiscal Q3 to $1.1 billion in the current quarter.

Cook stated that while the bulk of iPhones sold in the US are shipped from India and most Macs, iPads and Watches sold in the states are made in Vietnam, the vast majority of products for international countries come from China.

Notably, Apple has faced pressure from President Donald Trump’s administration about boosting its production in the US.

In the call, Cook added: “I would stress again that we do a lot in the United States, and we’ve committed $500 billion, and we’re always looking to do more.”

On AI, Cook said the company is growing its investment in the technology and planned to do so again in the current quarter, but did not provide specific numbers. It spent $8.8 billion on R&D during the period, up by about $800 million from last year.

“We’re very open to M&A that accelerates our roadmap. We are not stuck on a certain size company,” he added when asked about a potential acquisition in the AI space.

Numbers
Apple posted revenue gains across iPhones, Macs and services as well as all regions in its fiscal Q3 (ending 28 June).

Net profit rose 9.3 per cent year-on-year to $23.4 billion.

Overall sales improved 9.7 per cent to a record $94 billion, aided by 13.4 per cent growth in iPhones to $44.6 billion and a 15 per cent increase in Macs to $8 billion. Services increased 13.2 per cent to $27.4 billion.

Sales in the Americas increased 9.3 per cent to $42.2 billion, Europe grew 9.7 per cent to $24 billion, Greater China was up 4.4 per cent to $15.4 billion, while Japan rose 13.4 per cent to $5.8 billion

Sales in the rest of Asia Pacific jumped 20.1 per cent to $7.7 billion, thanks to strong demand in India.

Looking to the current quarter, Apple expects revenue to grow in the mid- to high-single digits, while services revenue is forecast to continue its 13 per cent growth trend.

*Additional reporting by Kavit Majithia