In the fiscal third quarter of 2025, Apple Inc. reported a remarkable performance, achieving a revenue of $94 billion—a 10% increase from the previous year—and a net profit of $23.4 billion. This growth was primarily driven by a 13% surge in iPhone sales, totaling $44.6 billion. Notably, the Chinese market contributed significantly, with sales rising by 4% to $15.37 billion, aided by local subsidies that enhanced product affordability.
Despite these impressive figures, Apple faced substantial challenges. The company incurred $800 million in losses due to tariffs imposed by the U.S. government, with projections indicating an additional $1.1 billion impact in the upcoming quarter. These tariffs have led to increased production costs, prompting Apple to consider price adjustments for its products.
In the realm of artificial intelligence (AI), Apple has been perceived as lagging behind competitors like Microsoft and Google, who have heavily invested in AI infrastructure. Recognizing this gap, CEO Tim Cook announced plans to significantly grow AI investments, aiming to integrate AI across all products and services. This strategy includes both internal development and external collaborations, with Apple acquiring seven AI-related firms in 2025 alone. A notable potential acquisition is Perplexity AI, valued at $18 billion.
Apple’s cautious approach to AI investment contrasts with the aggressive spending of its peers. While companies like Meta and Microsoft plan to collectively spend over $300 billion on capital expenditures this year, Apple’s projected capital expenditures stand at $11 billion. This conservative strategy positions Apple as a contrarian in Silicon Valley, appealing to investors skeptical of the AI investment frenzy.
The company’s services segment also demonstrated robust growth, contributing 29% to total revenue. This diversification helps balance Apple’s reliance on hardware sales. However, rising tariffs on imports from countries like India and Vietnam are projected to cost Apple $1.1 billion in gross profit, and antitrust challenges continue to threaten its app store and search revenue streams.
In summary, Apple’s Q3 2025 performance underscores its resilience in navigating complex challenges, including trade tariffs and the evolving AI landscape. By leveraging strong product sales, particularly in the iPhone segment, and making strategic investments in AI, Apple continues to solidify its position in the tech industry.
