Detailed Narrative
Strong Product Performance and Geographic Growth
Apple reported a June quarter revenue record of $94 billion, up 10% year-over-year, with EPS reaching a record $1.57, up 12% year-over-year. This growth was broad-based, with double-digit increases in iPhone, Mac, and Services. The company saw accelerated growth across most markets, including Greater China and many emerging markets, and achieved June quarter revenue records in over two dozen countries, including the U.S., Canada, Latin America, Western Europe, the Middle East, India, and South Asia.
Advancements in AI and Apple Intelligence
Apple views AI as a profound technology and is significantly increasing its investments in this area. The company is embedding AI across its devices and platforms, focusing on deeply personal, private, and seamless integration. Over 20 Apple Intelligence features have already been released, including visual intelligence and writing tools. Apple is also making good progress on a more personalized Siri, with features expected to be released next year, leveraging Apple silicon and private cloud compute architecture.
iPhone and Mac Drive Product Revenue
iPhone revenue reached $44.6 billion, up 13% year-over-year, driven by the strong popularity of the iPhone 16 family. The company shipped its 3 billionth iPhone since launch and saw record upgraders. Mac revenue was $8 billion, up 15% year-over-year, primarily due to the M4 MacBook Air's strength and continued adoption of Apple silicon. Both product categories saw strong performance in emerging markets and record high installed bases.
Services Continues Record-Breaking Growth
Services revenue hit an all-time record of $27.4 billion, up 13% year-over-year, with double-digit growth in both developed and emerging markets. This performance was broad-based, with sequential acceleration across most categories, including cloud services. Apple TV+ received 81 Emmy nominations, and Apple Music celebrated its 10-year anniversary. The App Store also saw double-digit revenue growth, setting a June quarter record.
Strategic Investments and Supply Chain Diversification
Apple announced a $0.5 billion commitment with MP Materials to strengthen the supply of recycled rare earth materials in the U.S. and is opening the Apple Manufacturing Academy in Detroit. These are part of a larger $500 billion investment in the U.S. over the next four years, focusing on advanced manufacturing, silicon engineering, and AI. The company is also diversifying its supply chain, with the majority of iPhones sold in the U.S. having an India country of origin, and Mac, iPad, and Watch from Vietnam, while products for other international countries largely come from China.
Tariff Impact and Mitigation Efforts
The company incurred approximately $800 million in tariff-related costs in the June quarter and estimates an impact of about $1.1 billion for the September quarter, assuming current global tariff rates remain. Management noted that tariffs are currently linear with volume, and the increase for September is partly due to higher volume and some build-ahead inventory in the prior quarter. Apple is actively exploring mitigation strategies, including optimizing its supply chain and increasing domestic manufacturing in the U.S.