Apple delivered truly impressive financial results for the third quarter, contrary to all expectations. However, this growth was overshadowed by the trade tariffs imposed by the US administration.
During the briefing, Tim Cook clarified that the additional tariffs imposed by Donald Trump have resulted in significant costs for the company. Most companies in the Dow Jones Industrial Average index have also felt this pressure. The main issue is that these costs could reach $1.1 billion in the current quarter.
Apple’s total revenue soared 10% year-on-year, reaching $94 billion. This is the most significant quarterly growth since December 2021, exceeding analysts’ forecasts. Traditionally, devices form the basis of revenue (more than two-thirds), with the iPhone retaining its status as a key driver, providing $44.58 billion, an increase of 13%. Although the share of smartphones in total revenue has slightly decreased to 47%, it is still close to half of all revenue.
Paradoxically, Apple called “Trump’s tariffs” one of the indirect revenue growth factors in the reporting period. Importers and retailers’ concerns about future duty increases led to faster buying of existing devices due to concerns about price increases.
Cook highlighted the Chinese market and the successful launch of the iPhone 16 as the main engines of growth. The company has reached a truly historic milestone: iPhone sales have surpassed the 3 billion mark since the launch of the first model. If there’s one thing Apple can do flawlessly, it’s sell smartphones. The figure itself is colossal, but it is even more impressive given the sustained growth trend — the company is gaining momentum, not slowing down.
The duties hit all Apple devices whose production is geographically linked to Asia:
- Most of the iPhones sold in the US are now manufactured in India.
- The main Mac, iPad, and Apple Watch volumes are shipped from Vietnam.
However, as Cook noted, simply moving operations from China isn’t sufficient to satisfy US authorities. There were direct threats of further duty increases if Apple did not speed up the transfer of part of the production directly to the United States. This poses a daunting task for the company to restructure global supply chains under political pressure, which inevitably entails additional costs and operational risks.
Financial results in other categories were mixed:
- Mac showed impressive growth of 15% to $8.05 billion, beating market expectations.
- Services continued their steady upward movement — +13% to $27.42 billion. iCloud subscriptions and increased activity in the App Store contributed to the growth.
- iPad has become the outsider of the quarter. Revenue decreased by 8.1% to $6.58 billion, falling short of analysts’ forecasts ($7.24 billion). Even the launch of the budget model in March failed to revive demand.
- Other products (Wearables, Home, Accessories) were also disappointing, falling 8.64% to $7.4 billion. The segment of wearable electronics clearly requires new impulses.
Apple, as is typical for a company of its size, remains optimistic despite the pressure of tariffs. The company forecasts revenue growth of 13% already in the current quarter. Cook emphasizes that the company plans to increase investments in a key trend — artificial intelligence. The growing team of AI experts shows that the direction is strategically important.
This is also confirmed by the fact that part of the costs will be directed towards developing its server infrastructure. Although the company still actively uses specialized cloud providers, the transition to Apple Silicon indicates a desire for greater independence and optimization of AI computing costs in the long term.
The company’s key financial goal is maintaining 46-47% profitability. But with $1.1 billion in expenses, that won’t be easy. However, judging by its most recent quarter, where revenue growth offset higher costs, Apple is demonstrating an ability to effectively balance global politics, market demand, and technology ambitions. Record iPhone sales and strategic investments in AI give Cupertino strong reasons for confidence, even in ongoing trade tensions.