KEY TAKEAWAYS
- iPhone sales missed expectations, showing Apple’s biggest product is losing some of its grip.
- China is a weak spot, with sales dropping 11%, likely due to increased competition.
- Services are Apple’s new star, bringing in $26.34 billion, a 14% year-over-year jump.
- iPads surprised with strong growth, but wearables are showing signs of slowing.
- Apple’s stock dipped, signalling investor concerns about iPhone demand in the long run
Apple just posted its fiscal Q1 2025 earnings, and while the numbers look solid overall, one key trend stands out: iPhone sales are slipping.
The iPhone, once Apple’s undisputed cash cow, missed expectations, bringing in $69.14 billion—down from last year’s $69.70 billion and well below the forecasted $71.03 billion.
Yet despite this, Apple’s business remains strong, and that raises an interesting question: Does the iPhone’s slowing dominance even matter anymore?
As iPhone Sales Dip, Services Play Larger Role In Apple’s Earning Potential
For years, the iPhone has been the backbone of Apple’s business. But these latest numbers suggest cracks in its dominance, with China playing a big role.
Sales in Greater China fell 11% to $18.51 billion, a sign that Apple is struggling against increasing competition from Huawei and other Chinese brands.
But here’s where things get interesting: Apple’s services business is booming. It brought in $26.34 billion, smashing expectations and growing 14% year-over-year.
That’s things like iCloud, Apple Music, and the App Store—subscriptions and digital purchases that don’t rely on selling new hardware.
This shift matters because it shows Apple is increasingly less dependent on the iPhone to drive growth.
iPad Surge, Wearables Not So Much
While iPhone sales lagged, the iPad actually had a great quarter. Apple sold $8.09 billion worth of iPads, a 15.2% jump from last year.
That’s an unusual win for a product category that’s often seen as stagnant.
On the other hand, Apple’s Wearables, Home, and Accessories category—which includes things like the Apple Watch and AirPods—saw a small decline, dropping to $11.75 billion from $11.95 billion.
That’s not a massive dip, but it suggests these products may be reaching a saturation point.
Wall Street’s Reaction: Meh…
Despite record revenue of $124.3 billion, Apple’s stock dropped 1.53% in after-hours trading. Why? Because investors are looking ahead, and slowing iPhone sales—especially in China—are a warning sign.
Apple’s real test will come in the next few quarters. The company is betting big on AI and services, with Apple Intelligence set to be a major focus this year.
If Apple can continue growing its services and find a way to re-energise iPhone demand, the long-term outlook stays strong.
Apple isn’t in trouble—far from it. But the days of iPhone-driven mega growth may be over, and Apple’s future now hinges on whether services and AI can pick up the slack.
Love keeping up with the latest mobile tech? Subscribe to our newsletter for all the biggest Apple, Android, and AI updates—straight to your inbox!
🚀 Sign up here.
Leave a Reply