Apple Q3 2025 Revenue Jumps 10%: iPhone 16 & China Demand Drive Record $94B Quarter

Q: Did iPhone sales grow in China?

Yes. Revenue rose 4% to $15.37 billion—beating estimates.

Apple Q3 2025 Revenue Jumps 10%: iPhone 16 & China Demand Drive Record $94B Quarter | Earnings Analysis

Key Takeaways

Apple posted record Q3 revenue of $94 billion, blowing past Wall Street’s $89.3 billion forecast.
iPhone sales surged 13% year-over-year to $44.58 billion, crushing expectations .
China revenue grew 4% despite brutal competition .
Tariffs cost Apple $800 million last quarter, and will hit $1.1 billion next .
Services revenue hit an all-time high of $27.42 billion .
Apple eyes Perplexity AI acquisition to replace Google Search .

The $94 Billion Roar

Apple’s third-quarter revenue hit $94 billion. Wall Street expected $89.3 billion. The stock jumped 2% after hours. The iPhone hauled in $44.58 billion, a $4.5 billion beat. Earnings per share landed at $1.57. Analysts guessed $1.43. Services revenue climbed to $27.42 billion. Another record.

Thomas Monteiro from Investing.com called it the company’s “biggest revenue growth in dollar terms since 2021.” All in what he termed Apple’s “slowest quarter of the year.” Cook called the growth “better than we expected.” He pointed to June revenue records in over two dozen countries, including the U.S., India, and China .

The iPhone Engine Revs

iPhone sales surged 13% year-over-year. $44.58 billion. Wall Street expected forty. Cook said the acceleration happened globally, in “the vast majority of markets.” Even in China. Especially in China.

China revenue hit $15.37 billion. Up 4%. Against the wall. Cook called it “the most competitive market in the world.” Huawei, Oppo, Xiaomi, all swinging. Apple took the punches. Still grew. Still beat estimates by $180 million .

Table: Apple Q3 Earnings vs. Expectations

Table showing financial metrics. Actual vs. estimated: Revenue $94B, EPS $1.57, iPhone $44.58B, China $15.37B, Services $27.42B. All exceeded estimates.

Tariffs and the April Anomaly

Tariffs cost Apple $800 million last quarter. Less than the $900 million initially feared. Cook called it “about $100 million less than expected.” But next quarter? $1.1 billion.

Something else happened. April saw an “unusual buying pattern.” Americans stockpiled iPhones and Macs. Tariff headlines sparked panic-buying. Cook said the revenue boost from this “pull ahead” behavior added about one point to Apple’s 10-point growth .

The company shifted supply chains fast. Cook stated most iPhones sold in the U.S. now come from India. Macs, iPads, Watches? Vietnam. “The vast majority,” he said .

Services: The $27.4 Billion Safety Net

Services revenue hit $27.42 billion. Another high. Apple TV+ snagged 81 Emmy nominations. “Severance” led with 27. Cook took a victory lap.

But beneath the shine, the Google deal. Alphabet pays Apple roughly $20 billion yearly to be Safari’s default search engine. That cash props up Services revenue. Now regulators circle. Antitrust rulings loom. Cook dodged questions: “I wouldn’t comment on potential court rulings.” The company’s outlook assumes the deal holds .

The AI Catch-Up Grind

“We are significantly growing our investment,” Cook said about AI. Spending jumped last quarter. Will jump again next. Teams reshuffled. Energy redirected.

Siri’s overhaul? Delayed. Again. “We expect to release the features next year,” Cook stated. Personalized. Private. Integrated. The usual promises.

Meanwhile, OpenAI bought Jony Ive’s AI hardware startup for $6.5 billion. Cook shrugged: “It’s difficult to see a world where iPhone is not living in it.” He called future AI devices “complementary, not substitution” .

The $14 Billion Perplexity Gambit

Rumors swirl. Apple eyes Perplexity AI. A $14 billion acquisition. Nothing confirmed. No talks yet, says Bloomberg. But the logic stings.

Google’s search monopoly crumbles. Alphabet’s market share slid from 91.1% to 89.6% in a year . Perplexity handles 780 million queries monthly. Growing 20% each month. Users pay $20/month for advanced features. Revenue run rate: $160 million .

Apple needs an AI search engine. Fast. If regulators kill the Google deal, Perplexity plugs the hole. Cook stays silent. The math screams .

Capital Expenditure: The AI Tax

Capital expenditures will rise. “Not exponentially,” CFO Kevan Parekh clarified. But AI drives the spend. Facilities and retail stores get scraps.

Meta and Microsoft bled cash for AI. Apple joins the club. Parekh called AI a “pretty significant driver” of 2025 spending. No numbers given. Just the warning .

Vision Pro: Still Breathing

Cook fielded a question about Vision Pro and smart glasses. “We continue to be very focused on it,” he said. No roadmap. No details. Just belief.

Meta’s AI glasses, built with Ray-Ban and Oakley, sell. They work. Vision Pro? Bulky. $3,500. Persona avatars got “more realistic.” Vision OS added widgets. Small victories .

Frequently Asked Questions

How much did tariffs cost Apple?

$800 million last quarter. Expected to hit $1.1 billion next quarter .

Will Apple lose its Google search deal?

Antitrust rulings threaten it. Cook won’t speculate. Apple’s guidance assumes it continues .

What is Perplexity AI?

An AI-powered search engine. Handles 780+ million queries monthly. Valued at $14 billion. Apple may buy it to replace Google .

Did iPhone sales grow in China?

Yes. Revenue rose 4% to $15.37 billion, beating estimates .

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