Prabhu RamApple topped expectations in Q2 FY25, buoyed by resilient iPhone sales and a stabilizing China business. But beneath the headline beat, the tech giant faces mounting challenges—from delayed AI rollouts to regulatory pressure on its high-margin services business.
Why This Stands Out
Apple posted revenue of $95.36Bn (+5% YoY) beating estimates. iPhone revenue rose 1% to $46.8 Bn, driven by improving China demand. Mac and iPad lines also outperformed forecasts, with revenue of $7.95Bn and $6.4Bn, respectively. Services revenue grew 12% YoY to $26.65Bn.
What’s Powering Growth
- iPhone resilience: Beat estimates with China stabilization
- Mac recovery: $7.95 Bn in revenue
- Services scale: Up 12% YoY, including App Store, iCloud, Apple TV+
- Hardware strength: Ecosystem continues to deliver despite wearable softness
- Diversified supply chain: India and Vietnam now key to U.S. product shipments
What to Watch
- Tariff risks: $900Mn cost expected in Q3; could grow in Q4
- AI rollout delays: Siri’s generative AI upgrade now pushed beyond June
- WWDC 2025: Crucial for Apple to articulate a credible AI developer story
- Services pressure: Epic ruling, EU DMA, and U.S. antitrust probe could reshape Apple’s ecosystem
- Supply chain resilience: Apple’s bet on India and Vietnam will be tested if trade tensions escalate
