Only by building cars can Apple become cool again.

In February last year, Apple was reported to have officially abandoned its decade - long car - building project and redirected most of its automotive team employees to AI. One and a half years later, Apple, which has been struggling to come up with the next blockbuster product, may be at the crossroads of restarting its car - building venture.

Early on August 1st Beijing time, Apple released its financial results for the third quarter of fiscal year 2025 (the second quarter of the natural year 2025) after the U.S. stock market closed. This is a financially satisfactory earnings report, but also a rather unremarkable scorecard.

In the previous quarter, Apple's major financial indicators exceeded the average expectations of Wall Street analysts, but the growth was not very rapid: revenue reached $94 billion, a year - on - year increase of 9.6%; net profit was $23.4 billion, a year - on - year increase of 9.3%.

According to Apple CEO Tim Cook, the revenue and profit growth in the previous quarter was mainly due to the double - digit percentage growth of the two major hardware products, iPhone and Mac, as well as the service business. Among them, the iPhone, which contributed nearly half of the company's revenue, brought in $44.6 billion in revenue last quarter, a year - on - year increase of 13.5%.

However, judging from the sales growth rate, the market situation of the iPhone is far from booming.

Data previously released by market research firm IDC showed that the iPhone shipped approximately 46.4 million units in the second quarter, a 1.5% increase compared to the same period in 2024. If the IDC data is accurate, the main reason for the significant increase in iPhone revenue last quarter is likely the rise in the average selling price, such as a higher proportion of expensive Pro - series models or the impact of the global tariff war.

Looking at different markets, the Americas remained Apple's largest market, with revenue increasing by 9.3% year - on - year last quarter. In the Greater China region, stimulated by the 618 e - commerce promotion and national subsidy policies, Apple emerged from a continuous decline, and its revenue increased by 4.4% year - on - year last quarter.

Investors seem to be less than satisfied with this earnings report. During Friday's U.S. stock trading, Apple's stock price fell 2.5% to $202.38. Currently, Apple's market value stands at $3.01 trillion. In contrast, NVIDIA's market value is $4.24 trillion; Microsoft's market value reached $4 trillion this week and then retreated to $3.9 trillion.

The signal revealed by the latest financial results is that Apple remains stable. Whether it's brand power, product portfolio, or market coverage, it is still one of the most powerful technology giants on the planet.

However, after NVIDIA and Microsoft crossed the $4 - trillion market - value threshold, Apple is still hovering around the $3 - trillion mark, with a gap of $1 trillion. Apple, which has been caught up and overtaken, is no longer regarded as a "searchlight - type" company that holds the key to the future world.

The root cause may be that after more than a decade of navigation in the post - Jobs era, Apple, which builds its foundation on products, is showing an increasingly serious "product shortage" problem.

When Cook took over Apple from Jobs, the foundation of Apple's empire had already been laid. But to this day, Apple is still operating within the old framework; cash cows like the iPhone, iPad, Mac, and App Store are all core product lines created in the Jobs era. Under Cook's leadership, Apple has generally deepened and broadened these product lines, including more diverse model combinations, more powerful hardware performance, and a more extensive application ecosystem.

Cook, who inherited Jobs' legacy, has made Apple's business performance thrive, but has never been able to lead the company to create the next revolutionary product. The AirPods and Apple Watch have impressive sales, but they are just accessories for the iPhone; the Vision Pro is indeed amazing, but it has been struggling due to problems such as cost, price, and software, and has failed to take on the leading role; the highly - anticipated Apple Intelligence has also failed to make it onto the main stage of AIGC.

Perhaps, if Apple doesn't have a "secret weapon," instead of continuing to bet on the above - mentioned products, it might be better to restart its car - building project and fight a worthy battle with all its might.

Image source: AI - generated

As the "ultimate hardware" that integrates cutting - edge technologies from multiple fields, the automobile is the best touchstone for testing the comprehensive strength of a hardware company and a "dragon gate" that must be crossed. Xiaomi was once trapped in the fierce competition of the mobile phone industry for a long time, but after more than four years of car - building, it has stood out among Huawei, Xiaomi, OPPO, and vivo, and has become the next benchmark in the Chinese technology industry.

Lei Jun, who makes mobile phones, has always emulated Jobs and is jokingly called "Lei Jobs." Now, after entering the car - building industry, he has become a highly - influential figure. Now, Cook might as well follow Lei Jun's car - building path, and Apple can learn from Xiaomi's experience and enter the car - building field itself to re - ignite the company's magic and regain the throne of the world's top hardware company.

A.

During yesterday's earnings conference call with analysts, Cook praised the outstanding performance of the Chinese market: the number of iPhone upgrade users reached a new record in the third fiscal quarter; the MacBook Air became the best - selling laptop in the Chinese market; the Mac Mini became the best - selling desktop computer, and so on.

He also said that the national subsidy policy had a positive impact on some Apple products. "Overall, it was a very good quarter," Cook said.

What Cook didn't mention is that just a few days before the release of the financial results, Apple closed a store in China for the first time in history.

According to Apple's official website in China, Apple's first store in Dalian will close on August 9th. The reason for the closure is "the departure of multiple retailers in the shopping mall." Currently, Apple operates more than 50 stores in the Greater China region.

Closing an Apple Store in China for the first time is a microcosm of Apple's poor performance in China in recent years.

According to IDC data, in the first half of this year, Apple's shipments in China declined year - on - year for two consecutive quarters, and its market share dropped below 14%, ranking fifth. In 2024, Apple ranked third with a 15.6% share.

Looking back further, Apple is in the downward phase of another 'iPhone cycle.'

Since the launch of the domestic version of the iPhone 4 in 2010, the sales volume of Apple phones has basically fluctuated in cycles of about five or six years. According to ZOL, in 2015, driven by the large - screen iPhone 6, Apple set a record of selling 58 million units annually, and then the sales gradually declined; in 2021, when the iPhone fully entered the 5G era, the sales volume rebounded to over 50 million units. In 2024, it dropped back to less than 43 million units.

Facing the periodic weakness of the Chinese market, Apple is not doing nothing. In the second quarter of this year, Apple rarely offered significant official price cuts. The price of the iPhone 16 Pro series dropped by more than $1000. However, judging from the latest financial results, this move might improve sales, but it's difficult to fundamentally stimulate the growth of the entire market.

The sluggish sales of the iPhone can be attributed to the changing climate of the Chinese smartphone market.

According to a report released by market research firm Canalys, in the second quarter of this year, the shipment of smartphones in mainland China was 67.8 million units, a year - on - year decrease of 4%. In addition, consumers are tightening their belts, and the replacement cycle has been extended, which has a greater impact on the high - priced iPhone; and the national subsidy policy is applicable to products below $6000, making it difficult for high - end iPhone models to enjoy the benefits.

The fact that the market cake is no longer expanding, combined with the aggressive expansion of Huawei, Xiaomi, OPPO, and vivo, poses a significant threat to Apple in the Chinese market. The biggest challenge is that the product strength of the iPhone is no longer far ahead.

As an iconic hardware product in the mobile Internet era, the iPhone redefined the smartphone at its inception. But now, competitors in the Android camp have not only learned the essence of Apple's design but also outperformed it in terms of localization, usability, and feature sets. It's not without reason that Android phones are more suitable for Chinese users than the iPhone.

On the other hand, the iPhone's once - proud powerful hardware is also being caught up by the Android camp. Whether it's the chip, screen, battery, or camera, Android flagship phones can compete with the iPhone; especially in terms of photography, Huawei, Xiaomi, OPPO, and vivo are stronger and more fun than the iPhone, which has been recognized by more and more users.

As for large AI models, Huawei, Xiaomi, OPPO, and vivo integrated large models into their phones almost immediately and made AI a fundamental feature across different application scenarios. Although their performance is mediocre, at least they are usable. In contrast, Apple is still working hard to introduce Apple Intelligence into China.

Under the influence of multiple factors, it's not surprising that the sales of the iPhone in China have declined again.

In terms of mobile phones, Apple currently holds a card regarded as a 'game - changer' - the foldable iPhone. However, according to the prediction of a J.P. Morgan analyst, the first foldable iPhone won't be available until next September, with a starting price of over $14,000.

The long - awaited solution won't solve the immediate problem. In the next few quarters, Apple can only rely on the brand power of the iPhone and the iOS ecosystem to maintain its performance. In the highly competitive Chinese market, the sales of the iPhone may continue to decline in the next few quarters.

Moreover, the global smartphone market is a mature one with a limited ceiling. For Apple, it's just a matter of how much profit it can make in this market, and the upper limit is clearly visible. For Apple, which was once a trend - setter, this is obviously not the most comfortable or reasonable state of existence.

B.

Stuck in the stagnant smartphone market, the iPhone can't break free from the general trend of the industry. Apple urgently needs to come up with a major new product, and new - energy vehicles are the best choice.

Currently, Apple has quite a few product lines besides the iPhone. However, product lines such as the iPad, Mac, AirPods, and Apple Watch are already mature. Although their sales are still growing, they are no longer the most eye - catching stars in the tech circle. The Vision Pro, which was launched at the beginning of last year, is too niche and expensive, and there are rumors that Apple is considering launching a cheaper version.

The bigger problem is that most of these products face similar issues as the iPhone: they are not 'cool' enough to excite consumers. In contrast, the new - energy vehicle project that was abandoned at the beginning of last year not only has market potential comparable to that of the iPhone but also can help Apple return to the ranks of 'cool companies.'

Compared with the smartphone market, the new - energy vehicle market is larger and is still in a period of rapid growth. In China, the world's largest market, according to data from the China Association of Automobile Manufacturers, the domestic vehicle sales in the first half of this year increased by 11.4% year - on - year, with the sales of new - energy vehicles growing by more than 40%.

Among them, the upgrade and replacement of old car owners contributed a significant amount of sales. Driven by factors such as trade - in subsidies and price wars among car manufacturers, domestic consumers have a stronger willingness to change cars. According to the "2025 Automotive Trade - in Consumption Insight Report" by Dongchedi, in the first quarter, the total number of passenger cars purchased through trade - in reached 2.793 million units, a year - on - year increase of 1.002 million units.

Meanwhile, the Chinese new - energy vehicle industry is still in the stage of fierce price competition and overall decline, lacking a high - end brand recognized by consumers.

In the past year or two, 'low price' has been the main weapon for car manufacturers to compete for market share in the new - energy vehicle market. New forces like NIO, XPeng, and Li Auto, as well as traditional car manufacturers like SAIC, BYD, and Geely, have all lowered the entry threshold by directly reducing prices, offering more value for the same price, providing limited - time discounts, and adding low - end models. Leapmotor, with its 'alternative' strategy, has become one of the best - selling new forces.

Even Tesla has not been immune. Since the second half of last year, Tesla has adjusted its prices in the Chinese market multiple times. The recently exposed 'bare - bones' Model Y is expected to be priced below $200,000.

Previously, Musk was deeply involved in 'politics,' which caused great controversy on both sides of the Atlantic and brought troubles to Tesla. In the first half of this year, Tesla's delivery volume decreased by 13.3% compared to last year, with a year - on - year decline for two consecutive quarters. It has to rely on the extended - range and 'bare - bones' Model Y to maintain its performance; the Model S/X, which targets the high - end market, is not Musk's main focus.

While car manufacturers are busy competing for 'price - sensitive consumers,' many buyers with sufficient budgets are turning to traditional luxury brands such as BMW, Mercedes - Benz, Audi, and Porsche. This creates an opportunity for Apple to enter the high - end market, which is also Apple's strength.

For Apple, building cars can not only fill the gap in the new - energy vehicle market and create a second growth curve but also create a key scenario for Apple Intelligence and quickly gain a foothold in the era of large AI models.

Apple launched Siri many years ago, which can be regarded as the forerunner of today's various AI agents. However, due to issues such as the technical route, it has become difficult to keep up with the times and offers a poor user experience, and is facing a complete overhaul; Apple Intelligence has been on the market for more than a year, and its current performance is far from satisfactory. In the wave of large AI models, Apple is not the main player on the stage.

One of the difficulties for Apple in developing AI is answering "Why do we need Apple Intelligence?"

Currently, many users have developed the habit of using AI apps and are willing to pay for them. Domestic Android phone manufacturers all have their own AI assistants, but most users still prefer to use Yuanbao, Doubao, and DeepSeek, which shows the strength of user habits.

Similarly, if Apple promotes Apple Intelligence in the iPhone, it will inevitably compete with third - party AI apps. Although the former may have an advantage in terms of functionality, the latter has a head start of several years, and users may not switch to Apple's own AI service immediately.

If Apple restarts its car - building project, the problem of the lack of usage scenarios for Apple AI will be greatly alleviated.

Smart cars are another core AI scenario besides mobile phones. Compared with smartphones, they are particularly suitable for AI voice interaction and have higher requirements for