Apple's revenue in China continues to decline. The good news is that the iPhone 17 is selling like hotcakes.
iPhone 17 Sets a Record
Early in the morning, Apple released its financial report for the fourth quarter of fiscal year 2025. The revenue reached $102.466 billion, a year - on - year increase of 8%, hitting a record high for the same period.
This strong performance exceeded market expectations, leading to a significant rise in Apple's stock price. This is also the third time in fifteen years that Apple's stock price has increased after the release of its financial report.
The Best - selling iPhone 17 and the Embarrassing iPhone Air
What everyone is most concerned about is whether the iPhone 17 series, which is full of sincerity this year, has "sold like hotcakes".
Apple CEO Tim Cook also revealed in a conference call that iPhone revenue reached a record high. The demand for the iPhone 17 series "far exceeded expectations". Store footfall increased significantly, and consumer response was very strong, setting a new record for the number of upgrade users in the September quarter.
It's worth noting that the financial report data only covers up to September 27th. The iPhone 17 series had been on sale for less than 10 days. Therefore, the main sales contribution still came from the old iPhones. The sales reached $49 billion, higher than $46.2 billion in the same period last year, but still lower than Wall Street's expected $50.2 billion.
Cook attributed the reason to supply limitations. Both the iPhone 16 and iPhone 17 are in short supply, and Apple is working hard to fulfill all orders.
Therefore, to see how well the iPhone 17 has actually sold, we have to wait for the next quarter's financial report. The upcoming overseas holiday season and the shopping season in China are expected to drive up the sales of the iPhone 17. Cook estimates that the next quarter will be the quarter with the highest revenue and iPhone sales in Apple's history.
▲ Image source: Reuters
Recently, there have been many rumors about the sales performance of the iPhone Air. Analyst Ming - Chi Kuo revealed that the production of this ultra - thin model has been cut by 80%, and it is expected to be discontinued by the end of this year.
During the conference call, an analyst directly asked Cook about related issues. Cook adhered to Apple's tradition of "not disclosing the sales volume of individual iPhone models separately" and said that he deliberately avoided this question.
Cook also added that currently, Apple's production capacity limitations are mainly concentrated on "the high - end and entry - level ends".
However, in Apple's plan, the iPhone Air has never been a "sales champion". This ultra - thin phone with a lot of technology has a smaller profit margin than the iPhone 17 and iPhone 17 Pro.
Just like domestic foldable phones, the main purpose of the iPhone Air is more to "make its presence felt" and "show off its strength". It is a testing ground for Apple's technology.
Moreover, as a phone with the Apple logo, the sales of the iPhone Air won't be too bad. Even the less - noticed iPhone 16 Plus shipped over 5 million units in two and a half months in 2024. Counterpoint data shows that the iPhone 16 Plus was the tenth best - selling phone globally in the first quarter of this year.
Currently, the only factor that is likely to affect the global sales of the iPhone Air is the poor eSIM activation process and strict usage policies of Chinese operators.
▲ Image source: CounterPoint
Mac Installation Reaches a Record High, but iPad Sales are Stagnant
It's not just the iPhone that has set a record. Services, the second - largest source of Apple's revenue, also achieved a total revenue of $28.75 billion, with a growth rate of 15%. It is also Apple's fastest - growing business.
This business segment includes the App Store, Apple Pay, Apple TV, Apple Music, iCloud, and Google's licensing fees.
Like with the iPhone, Apple doesn't disclose detailed data for individual services. However, it mentioned that Apple Pay's revenue reached a record high, and the number of active users had double - digit growth.
In addition, Apple's service business set revenue records in the Americas, Europe, the Asia - Pacific region, and Greater China.
Despite the antitrust investigations faced by the App Store globally, Apple's service business has maintained a very high growth rate, reassuring the market. Compared with the fluctuating hardware sales, the service business has high profits and user stickiness, gradually becoming an important and stable source of income for Apple.
The sales of products other than the iPhone and services are a bit lackluster.
The best - performing product line is the Mac, with revenue reaching $8.7 billion, higher than $7.7 billion in the same period. The number of Mac installations also reached a record high.
The biggest contributor is the MacBook Air released in March this year. This product line has become the most popular Apple product in recent years.
Apple expects the Mac's performance in the year - end quarter to be worse than the same period last year. After all, last year there were new iMacs, a fully - updated MacBook Pro, and the popular M4 Mac mini, while this year there is only the M5 MacBook Pro at the end of the year.
Although the iPad also launched new products such as the iPad Air and an entry - level model at the beginning of this year, the sales were mediocre. The sales of $6.95 billion were basically the same as last year.
Half of the customers who bought an iPad this quarter were first - time buyers, indicating that the "incremental upgrade" new iPad has a hard time appealing to old users.
However, next year's iPad Air and iPad mini are expected to use OLED high - refresh - rate screens, which is finally something to look forward to.
The quarterly revenue from wearables and home products was $9.01 billion, lower than the same period. The new Apple Watch series and AirPods Pro 3 didn't have an obvious driving effect.
It's worth noting that the new Apple TV 4K set - top box and HomePod mini have missed the two rounds of new product releases in September and October. Rumors suggest that Apple still plans to release them within this year.
Greater China Revenue Falls Short of Expectations but is Set to Bounce Back
Although most of the financial report data is good, as Apple's second - largest market, the revenue in Greater China decreased year - on - year. The quarterly revenue was $14.493 billion, a year - on - year decrease of 3.6%. The revenue in fiscal year 2025 was $64.377 billion, a year - on - year decrease of 3.8%.
Regarding Apple's performance in the Chinese market, Apple's response was also "supply limitations". The iPhone is still in short supply in China.
However, Apple said that the footfall in Chinese stores is increasing. Coupled with the upcoming e - commerce shopping events and the popularity of the iPhone 17 in China, it is expected that the revenue in the Chinese market will resume growth in the next quarter.
Apple also talked about the impact of "government subsidies" on its sales. Even though the prices of many Apple products are higher than the subsidy range, overall, it has achieved good results.
AI - Powered Siri to Launch Next Year
Since last year, the question that has never been absent from Apple's financial report conferences is "AI".
Coinciding with the one - year anniversary of the launch of Apple Intelligence, an analyst asked if Apple had seen any signs of AI driving product sales. Apple said it hadn't conducted in - depth research but was optimistic about AI becoming a driving factor for product sales and expected it to become a more important factor.
Regarding the future development of Apple Intelligence, Cook said that Apple will continue to promote the integration of third - party AI tools, will cooperate with more partners over time, and reiterated that it is "considering" acquisitions in the AI field.
Since its launch a year ago, Apple has only embedded ChatGPT into Siri. It is reported that internally, Apple is developing the integration with Google Gemini and plans to cooperate with Anthropic and Perplexity.
The AI - powered Siri has also become a regular question. Cook said that "progress is going well" and it is expected to be launched next year.
The significant design changes in iOS 26 and the sincere iPhone 17 series have diverted external attention from Apple's slow progress in AI. However, this is still an "elephant in the room" that Apple can't avoid.
Unfortunately, Apple didn't respond to the progress of Apple Intelligence in China during this financial report conference. Previously, Bloomberg reported that Apple still plans to launch the Chinese - version Apple Intelligence by the end of this year. Cook's visit to China was also considered to be promoting related progress.
However, there is still no sign of AI in the current iOS 26.1 version, and there isn't much time left for Apple this year.
Breaking away from the continuous gloom of last year's financial report, the iPhone 17 series is indeed a "shot in the arm" for Apple. It also shows that as long as Apple offers more sincere products instead of making incremental upgrades, the market will vote with its feet.
This outstanding financial report can even be said to be just the beginning. Starting this year, Apple will enter three consecutive "boom years", with a series of exciting new products to be launched, presenting a picture of economic upswing:
- Foldable iPhone & All - glass iPhone
- OLED + High - refresh - rate iPad Air and iPad mini
- Newly - designed touch - screen OLED MacBook Pro
- First Apple smart glasses
- New smart home products with screens
- AirPods with infrared cameras
Although these new products are exciting, I'm more looking forward to what Apple can achieve with AI.
After all, everyone knows that AI is the future of interaction, and we still lack a guide to lead us in the right direction.
This article is from the WeChat official account "ifanr" (ID: ifanr). Author: Discovering Tomorrow's Products. Republished by 36Kr with permission.