Cailian Press, August 1st (Editor: Xia Junxiong)
After the market closed on Thursday, July 31st, in the Eastern Time Zone, Apple announced its financial results for the third fiscal quarter of 2025 (ending June 28th), which far exceeded Wall Street expectations, achieving the strongest quarterly revenue growth since December 2021.
Overall, iPhone sales were strong, with the service business continuing to perform well, while Mac business became the fastest-growing segment. However, product lines such as iPads and wearable devices still faced pressure.
The financial report showed that Apple’s total revenue for the third quarter reached $94.04 billion, setting a new high level in recent years, with a year-on-year increase of 10%, significantly higher than the market expectation of $89.53 billion; net profit reached $24.43 billion, with earnings per share at $1.57, also higher than the expected $1.43.
iPhone 16 strongly supported, smartphone revenue increased by 13%
The core business iPhone achieved a year-on-year increase of 13%, with revenue reaching $44.58 billion, significantly better than the market expectation of $40.22 billion.
Apple CEO Tim Cook stated in the financial report conference call that the sales of iPhone 16 were outstanding, far surpassing last year’s iPhone 15, especially in the demand for upgrades among existing users, “iPhone 16 sales achieved strong double-digit growth.”
Mac business grew nearly 15% year-on-year
The most impressive performance was in the Mac business, with revenue reaching $8.05 billion in the third quarter, nearly 15% higher than the expected $7.26 billion. This growth is related to the launch of the new MacBook Air in March this year, a model that has long been Apple’s best-selling laptop.
Apple’s service business, including iCloud, Apple Music, AppleCare, the App Store, and its search agreement with Google, continued to grow. The third fiscal quarter revenue reached $27.42 billion, a year-on-year increase of 13%, exceeding market expectations.
Cook emphasized that iCloud subscriptions continue to grow, and App Store revenue has achieved double-digit growth, becoming an important engine for profitability.
iPad and Wearable Business Pressure
However, not all product lines have seen growth.
The iPad’s third fiscal quarter revenue was $6.58 billion, down 8% year-on-year, despite the launch of low-priced new products in March, which failed to boost overall sales.
Revenue from wearable devices and other hardware products (including the Apple Watch and AirPods) was $7.4 billion, down 8.6% year-on-year, also below market expectations.
Notably, Apple’s revenue in Greater China rebounded. In this quarter, total revenue from Greater China was $15.37 billion, up 4% year-on-year, reversing the trend of declines of 2% and 11% in the previous two quarters.
Cook stated that consumer subsidies in some areas of China significantly boosted the company’s products.
Apple’s third fiscal quarter saw about $800 million in tariff expenses, and it is expected that the tariff costs for the September quarter will reach $1.1 billion (assuming no change in tariffs). Cook pointed out that about one percentage point of revenue growth came from “consumers buying products ahead of time due to expectations of higher tariffs.”
Future tariff impacts may further intensify. Previously, the mutual trade tariff exemption for smartphones was set to expire, posing the risk that Apple might face the additional high tariffs on iPhones imported from India, especially after President Trump announced new tariffs against India on Wednesday.
Since the beginning of this year, Apple’s stock price has fallen by about 17% (as of Thursday’s close), significantly lagging behind other tech giants such as Nvidia, Microsoft, and Meta. Apart from tariff risks, the main reason for this is that Apple has so far failed to clearly articulate a compelling AI strategy.
“We are significantly increasing our investment in AI, integrating it into everything from devices to platforms to the company itself,” Cook stated.
He also revealed that Apple has acquired approximately seven companies this year, though not large scale. However, the company is “willing to accelerate product roadmaps through mergers and acquisitions,” currently holding about $133 billion in cash on its books.
Furthermore, investors are closely monitoring the ruling in Google’s antitrust case. A key question in this case is whether Google can continue to be the default search engine for Safari browsers. This agreement accounts for only 6% of Apple’s revenue but contributes nearly 20% to operating profits because related costs are virtually zero.
Meanwhile, another lawsuit in the United States demands that Apple relax App Store restrictions, allowing developers to sell digital goods and subscription services outside the platform more easily, potentially impacting another core source of profit for Apple.