Apple's Q2 income is a “must”. Here is the reason.

00:00 Speaker A

It was a hard quarter for Apple with tariffs, problems of the supply chain and the company is still recovering from a botched Apple Intelligence rollout for many investors. Apple reports on Thursday after the end of the year, and our next guest says that it is one of the most expected winning ideas for Apple of all time. Further information on Tom Forte, Managing Director and Senior Consumer Internet Analyst at Maximum Group. Tom, it's great to see you. Most of the most expected of all time, talk to me about why this is please.

00:48 Tom forte

Yes, as a long -time supporter of the company from the time when Steve Jobs led it. I am very excited to see how Tim Cook tariffs, supply chains and all problems that are faced with the company. I was very interested in seeing that they sent two billion dollars of iPhones from India to alleviate the tariff effects. I think that is need to watch TV and a winning call. I'm really looking forward to it.

01:49 Speaker A

Tom, you know I spoke to another Apple analyst today, um, long -time Apple Watcher like you, Tom, and he really thought, listened, he agreed. He believes that tariffs are for Apple in the front and in the middle this quarter. It will be a taprage after a taprage that has to call, he thinks. I think you know how to think through it yourself, Tom. I mean, the question is in a way, in a way, basically how the navigation of the potential Trump tariff effects? You know what is the strategy? What is the schedule? What do you think, will he say there?

02:53 Tom forte

So three thoughts. Josh, um, could hear Tesla last week, Apple could do something similar that produce its products on a regional basis like Teslas from Tesla. So they could produce iPhones in both the USA and China and India. The challenge to do it at reasonable costs in the United States. I think when it comes to tariffs, can a company ultimately rely on suppliers to bear the incremental costs? How much of the incremental costs will the company bear? And how much will you try to pass them on to consumers? And in this regard I think Apple, you know, Premium brand, UH sells higher articles. So you have a price pressure or price performance. But um interesting situation for Apple.

04:26 Speaker A

I mean there is price -performance and then there is a price current. And when we heard that some of their colleagues on the street estimated to estimate how much producing telephones in the USA can cost in relation to the finished product. And we talk here with huge numbers, we may talk about doubling the price. Do you think is an exaggeration? And do you think that consumers would bear these costs would be ready to pay them?

05:04 Tom forte

I do not think that it is an exaggeration when it comes when it comes from China 100 % tariff, Apple's articles are not freed. How much could this increase the costs if an iPhone were made in the USA? At the same time, I think that part of the narrative about Apple is simply too negative. In the many cases, you have seen that the carriers bear the incremental costs. They pass on strong promotions to consumers. I think they are, although I think the next 12 months and 18 months for Apple are a challenge for Apple if you look at the things that have happened in the past, such as: B. a high degree of advertising activities by airlines or the production simply in a lower tariff country, India against China. I think it will be challenging, but maybe not as challenging as some people fear.

06:32 Speaker A

You know Tom, the stock drives into this pressure. It has decreased by about 15%. I mean how much of the potential bad news is already rated here?

07:00 Tom forte

Yes, so I think Josh, you hit the nail on the head there, which is really about how much of the bad news is rated there. They had a double -digit drop in sales to China in the Decquart. Let us assume that in the March district you have another double -digit decline and have a further two -digit decline in the June quarter and then the margin compression through tariffs. I think that 15% could be tested. Um there is the potential that short -term performance could be even weaker, and maybe the shares will come under pressure on Thursday.