SAN FRANCISCO (AP) \u2014 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.<\/p>\n
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<\/a> and others in the pipeline.<\/p>\n Despite the doubts, Apple remains a moneymaking machine.<\/p>\n 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\u2019s 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.<\/p>\n All those numbers were well above the analyst projections that steer investors, helping to boost Apple\u2019s recently slumping stock price by about 3% in extended trading. But the unexpectedly solid performance doesn\u2019t necessarily mean it\u2019s smooth sailing ahead for Apple.<\/p>\n Tallying the toll of Trump’s tariffs<\/p>\n Trump\u2019s trade war<\/a> targeting foreign-made products such as the iPhone and Apple\u2019s stumbling start<\/a> 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.<\/p>\n Before Thursday\u2019s report came out, Apple\u2019s 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\u2019s 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.<\/p>\n 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.<\/p>\n 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.<\/p>\n Story Continues <\/p>\n Sizing up how Apple and consumers are reacting to the trade war<\/p>\n Apple softened the blow of Trump\u2019s tariffs on products made outside the U.S. during the past quarter by shifting its production of iPhones from China to India.<\/a> But the administration intends to impose a 25% tariff on goods from India,<\/a> 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.<\/p>\n 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.<\/p>\n 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. \u201cWe ultimately will do more in the United States,\u201d he said.<\/p>\n The AI challenges still ahead<\/p>\n