iPhone sales drive Apple’s 10% revenue gain despite US$800 million in tariffs and Siri delays
iPhone sales surged 13 percent to US$44.58bn, helping Apple post its strongest quarterly revenue growth since 2021 — even as the company flagged a projected US$1.1bn hit from tariffs in the current quarter and continued delays in its AI rollout.
According to Apple’s fiscal Q3 earnings report, revenue rose 10 percent year-over-year to US$94.04bn, beating analyst expectations of US$89.54bn as reported by CNBC.
Net income reached US$24.43bn, or US$1.57 per share, exceeding estimates of US$1.43.
CEO Tim Cook said about one percentage point of that revenue growth — roughly US$82m — stemmed from customers buying early to avoid potential price hikes related to US tariffs.
He told analysts that Apple saw “evidence in the early part of the quarter, specifically, of some pull-ahead related to the tariff announcements,” and confirmed Apple would face another US$1.1bn in tariff costs during the July–September quarter, as reported by The Canadian Press.
Despite that, the company projected continued revenue growth in the mid- to high-single digits for the current quarter, as per Reuters.
Apple’s gross margin rose to 46.5 percent, above forecasts, and is expected to stay between 46 and 47 percent.
Apple reported mixed results across its product segments.
As per CNBC, Mac sales rose 15 percent to US$8.05bn, and services revenue increased 13 percent to US$27.42bn, driven by iCloud and App Store gains.
However, iPad and wearables revenue declined 8 percent each, missing analyst expectations.
Sales in Greater China — a focal point for global tech supply chains — rebounded with a 4 percent increase to US$15.37bn, according to Reuters.
Cook credited a local subsidy program for aiding sales, noting it was “the first full quarter of the subsidy playing out.”
However, Apple continues to face pressure on its AI ambitions.
More than a year after announcing upgrades to Siri, many features remain unreleased.
Bloomberg reported that Apple is developing a stripped-down ChatGPT-style “answer engine” under a new team called AKI (Answers, Knowledge and Information), led by Robby Walker.
The tool would integrate with Siri, Spotlight and Safari, but remains in early stages.
Apple has yet to develop a native AI search engine and still relies on a multibillion-dollar agreement with Google.
Bloomberg noted the company could lose billions annually if a US Department of Justice ruling alters that deal.
Internally, Apple’s Foundation Models team has faced turnover.
Bloomberg reported that four AI researchers, including Ruoming Pang, Tom Gunter, Mark Lee and Bowen Zhang, left for Meta’s superintelligence lab, lured by higher pay and promises to work on more advanced systems.
Cook maintained that Apple is “significantly growing” its AI investments and has acquired around seven companies this year to accelerate development.
He also said the company sees AI as “one of the most profound technologies of our lifetime.”
As per The Guardian, critics like Forrester’s Dipanjan Chatterjee argue that Apple’s AI rollout has been “glitchy,” with “incremental” rather than transformational features.
Cook said Apple remains committed to expanding chip production in the US, noting, “We ultimately will do more in the United States.”
Yet the shift of iPhone production to India to avoid China tariffs could be undermined by a newly announced 25 percent US tariff on Indian goods.
Apple’s market cap remains above US$3tn, but shares have dropped 17 percent in 2025.
By contrast, Nvidia and Microsoft — both leading in AI — have gained 32 percent and 27 percent, respectively, as noted by The Canadian Press.
Leadership transitions are also underway.
Jeff Williams will retire as chief operating officer by year-end and shift into a temporary senior vice-president role, with Sabih Khan stepping in as COO.
As reported by Bloomberg, Apple is expected to consolidate design under Tim Cook and assign health software to Craig Federighi.
Despite external pressures and lagging AI development, Apple maintains that iPhone demand remains strong.
Cook said the iPhone 16 outperformed the iPhone 15 with “strong double digits” growth and confirmed the active user base hit record highs across geographies.
