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Apple Reports Record Profits and It's Not Because of the iPhone

© Apple

The Cupertino company has just unveiled historic financial results for its first fiscal quarter of 2025, with revenue reaching $124.3 billion. This exceptional performance comes in a particular context: for the first time in a long time, it is not the iPhone that is driving growth. A new era is dawning for Apple, marked by the rise of its services and the success of its other products.

Services, Apple's new golden goose

Apple's Services division continues to impress. Quarter after quarter, it sets new records and confirms the relevance of the strategy initiated a few years ago by Tim Cook. The App Store, Apple Music, iCloud, Apple TV+ and Apple Arcade now form a complete ecosystem that generates considerable recurring revenue.

This successful diversification allows Apple to offset the slight decline in iPhone sales. Services now represent a growing share of total revenue, with particularly high margins. This gradual transformation of Apple's business model strengthens its resilience in the face of longer smartphone renewal cycles.

The success of services is based in particular on the installed base of Apple devices, which has reached a new historical record. Every iPhone, iPad or Mac user becomes a potential customer for all the services offered. This synergy between hardware and services constitutes a major competitive advantage that few competitors can match.

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Artificial intelligence, the next growth engine ?

Apple recently rolled out its artificial intelligence features, dubbed “ Apple Intelligence “, in certain markets. Tim Cook claims that the iPhone 16s are selling better in countries where these features are available. However, initial feedback suggests that these innovations, while useful, have not yet revolutionized the user experience. In France, we will have to wait a while before seeing whether these developments live up to the American giant's promises.

The release of iOS 18.3 this week marks a new milestone, with AI features enabled by default for countries where it is available. International expansion is planned for April 2025, with support for additional languages.

This gradual strategy could pay off in the long run. Apple has the financial resources to invest heavily in AI, as evidenced by its ability to return more than $30 billion to shareholders this quarter. Promised improvements to Siri could transform the voice assistant into a true competitor to ChatGPT and other conversational AI solutions.

iPhone lags, iPad and Mac take off

The Mac division is experiencing a return to form thanks to the launch of a new, redesigned and more compact Mac mini, as well as the update of the MacBook Pro. These new models, equipped with the latest Apple Silicon chips, are appealing to both individuals and professionals.

The iPad is also maintaining solid growth, benefiting from a unique positioning between mobility and productivity. The iPhone and the wearables division (Apple Watch and AirPods) are showing signs of weakness, with a slight decline compared to the previous year.

Apple's results demonstrate its ability to maintain sustained growth despite the maturity of the smartphone marketEarnings per share rose 10% to $2.40, a new record that pleased investors. Successful diversification of revenue streams and promising prospects in AI point to a bright future for the Apple brand.

  • Apple achieves record quarter with $124.3 billion in revenue despite decline in iPhone sales
  • Services division reaches record highs and becomes a pillar of growth
  • Artificial intelligence and new Macs are the next growth drivers

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Teilor Stone

By Teilor Stone

Teilor Stone has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining Thesaxon , Teilor Stone worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my teilor@nizhtimes.com 1-800-268-7116