$124.3 Billion: Apple Hits Record Revenue, But China Sales Drop 11.1% Amid iPhone Slowdown

Apple posted a record $124.3 billion in revenue, up 4% year-over-year, despite an 11.1% drop in China sales and slower iPhone growth.

Introduction

Apple Inc. has announced a record-breaking quarterly revenue of $124.3 billion, reflecting a 4% year-over-year growth.

Despite the milestone, the company faced challenges, particularly in China, where sales declined sharply, and iPhone sales missed Wall Street estimates.

Key Highlights of Apple’s Q1 2025 Earnings Report

Revenue Surge: Apple posted an all-time high of $124.3 billion in revenue, up 4% compared to last year.

iPhone Sales Decline: The iPhone segment generated $69.14 billion, missing analysts’ expectations of $71.03 billion.

China Market Struggles: Revenue from China plunged 11.1% to $18.51 billion, the sharpest decline since Q1 2024.

Strong Services & Product Growth: Services revenue surged 14% to $23.12 billion, while Mac and iPad sales grew by 15%.

Future Growth Plans: Apple Intelligence (AI) expansion is set for April, targeting new markets, including India.

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iPhone Sales Fall Short Amid China Slowdown

While Apple’s total revenue set a new record, its iPhone sales failed to meet expectations. The company generated $69.14 billion in iPhone revenue, falling short of the anticipated $71.03 billion.

This marks a slight decline compared to the same quarter last year.

Apple CEO Tim Cook attributed this underperformance to a variety of factors, including the limited rollout of Apple Intelligence (AI), which is only available in select English-speaking markets.

He explained that iPhone adoption was higher in regions where Apple Intelligence was introduced, suggesting that the feature’s absence in key markets may have affected sales.

China Revenue Declines by 11.1%

Apple’s struggles in China were particularly evident, with revenue in the region falling by 11.1% to $18.51 billion.

This marks the steepest decline since Q1 2024. Cook cited multiple reasons for the drop, including supply chain disruptions and challenges related to inventory management.

Moreover, the absence of Apple Intelligence in China has put Apple at a disadvantage against local competitors such as Huawei and Xiaomi, which are increasingly gaining traction with advanced AI-powered devices.

Other Segments Show Strong Growth

Despite the challenges in iPhone sales, Apple’s other product segments performed exceptionally well:

  • Mac and iPad Sales: Both categories saw a 15% revenue boost following the launch of new models.
  • Services Revenue: Apple’s services division, which includes subscriptions, warranties, and the App Store, grew 14% year-over-year, reaching $23.12 billion.
  • Wearables and Accessories: Although Apple did not disclose detailed numbers, its wearables and accessories segment also contributed to overall growth.

Tim Cook emphasized the importance of the services sector, revealing that Apple now has over one billion active subscriptions across its platforms.

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Apple Intelligence Expansion Planned for April

Looking ahead, Apple plans to expand its AI-driven features to more regions. In April, the company will introduce Apple Intelligence to additional languages and markets, including India.

Cook stated that AI integration is playing a crucial role in driving demand, particularly in regions where it is already available.

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Future Outlook and Market Expectations

Apple has projected “low to mid-single-digit” revenue growth for the March quarter. The services segment is expected to maintain strong performance, with projected growth in the “low double digits.”

The company’s ability to navigate challenges in China, expand its AI offerings, and sustain growth in its services division will be key factors influencing its financial performance in the coming months.

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Conclusion

Despite a slight dip in iPhone sales and ongoing challenges in China, Apple’s record-breaking revenue highlights its resilience and ability to innovate across various segments.

With planned expansions for Apple Intelligence and continued services growth, the tech giant remains well-positioned for the future.

Kumar Priyadarshi
Kumar Priyadarshi

Kumar Joined IISER Pune after qualifying IIT-JEE in 2012. In his 5th year, he travelled to Singapore for his master’s thesis which yielded a Research Paper in ACS Nano. Kumar Joined Global Foundries as a process Engineer in Singapore working at 40 nm Process node. Working as a scientist at IIT Bombay as Senior Scientist, Kumar Led the team which built India’s 1st Memory Chip with Semiconductor Lab (SCL).

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