Apple held an earnings call for the third fiscal quarter (second calendar quarter) of 2025 today, beating expectations with revenue of $94 billion. During the call, Apple CEO Tim Cook and CFO Kevan Parekh shared insights into device sales, tariffs, and more.
iPhone Popularity
The iPhone 16 models were more popular than the iPhone 15 models were last year. Cook said that iPhone 16 sales increased "strong double digits" compared to the iPhone 15, with the iPhone 16 popular with users upgrading to a new model.
Apple set a June quarter record for upgraders, and Cook said that was because of the "strength of the product."
Apple recently shipped its 3 billionth iPhone since the device debuted in 2007.
3 billion iPhones sold! Thank you to everyone who's made iPhone such an important part of their lives. I'm incredibly excited for what's ahead! — Greg Joswiak (@gregjoz) July 31, 2025
AI
Cook said that Apple is "very open" to an acquisition that would accelerate its AI development roadmap. AI is "one of the most profound technologies of our lifetime," Cook said, adding that Apple is "significantly growing" its investments and reallocating people to work on AI at the company. "We're putting all of our energy behind it," Cook said.
"We're not stuck on a certain size company," Cook added during the call. "We basically ask ourselves whether a company can help us accelerate a road map, if if they do, then we're interested, but we don't have anything to share specifically today."
Cook also said that Apple is "making good progress" on developing a more personalized version of Siri that is powered by Apple Intelligence. Apple is on track to release the features next year.
Cook was asked whether large language models like ChatGPT could be a commodity in the future. Cook declined to talk speak on he subject because "that gives away some things in our strategy."
The way that we look at AI is that it's one of the most profound technologies of our lifetime, and I think it will affect all devices in a significant way. What pieces of the chain are commoditized and not commoditized? I wouldn't want to really talk about today, because that gives away some things on our strategy.
Tariffs
According to Cook, approximately one percentage point of Apple's 10 percent sales growth can be attributed to customers buying more products to get ahead of tariffs.
"We saw evidence in the early part of the quarter, specifically, of some pull-ahead related to the tariff announcements," Cook told Reuters.
Cook said that tariffs cost the company $800 million in the June quarter, and that the impact could be $1.1 billion in the September quarter.
To mitigate tariffs in the future, Apple is optimizing its supply chain, and Cook said the company "will do more in the United States."
Post iPhone Devices
Cook was asked about AI development and what Apple would do if dependence on screens diminishes. Cook said that it's "difficult to see a world where iPhone's not living in it."
He said that Apple is "thinking about other things," but those future devices are likely to be "complementary devices" not substitutions.
Services
Services revenue was $27.4 billion, up from $24.2 billion in the year-ago quarter, marking an all-time revenue record. Apple TV+ viewership was up strong double digits year over year.
App Store revenue grew double digits year over year, and cloud services also saw an all-time revenue record. Paid accounts and paid subscriptions grew double digits year over year, and Apple has "well over a billion" paid subscriptions across services.
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