Apple Smashes Q3 2025 Expectations with iPhone 16 Sales Surge

Apple’s June quarter results are in, and they landed ahead of Wall Street expectations. For fiscal Q3 2025, the company posted $94 billion in revenue, a 10% year-over-year increase and $1.57 earnings per share. Analysts were looking for $89.3 billion and $1.43, making this a solid beat on both metrics.

iPhone 16 Propels Strong Quarter Amid Mixed Category Results

The iPhone 16 lineup did the heavy lifting, driving iPhone revenue to $44.6 billion, a 13% jump from the same period last year and the highest ever for a June quarter. Mac sales also turned in a strong performance, rising 15% to $8 billion. Services hit a record $27.4 billion, continuing its upward trend. On the downside, iPad slipped to $6.6 billion, and Wearables dipped slightly to $7.4 billion.

China, a region where Apple has faced increasing competitive pressure, delivered 4% growth. The iPhone 16 lineup took the top three spots in Urban China, an unusual feat given the strength of rivals like Huawei, Oppo, and Xiaomi. Apple also notched June quarter records in over two dozen countries, including the US, Brazil, and markets across South Asia.

Tariff Fallout: Short-Term Lift, Long-Term Risk

Tariffs again shaped the earnings picture. Apple took an $800 million hit related to trade duties, slightly below earlier forecasts, but the company expects that to rise to $1.1 billion next quarter.

The geographic shift in Apple’s supply chain continues. Most US-bound iPhones now come from India, while Macs, iPads, and Apple Watches sold in the US are largely made in Vietnam. But India’s iPhone production role is under fresh pressure. A pending US tariff hike from 10% to 25% on India-made iPhones could take effect just ahead of the iPhone 17 launch. If imposed, Apple may have to either absorb the higher cost or pass it along to consumers.

There was also a notable surge in US demand back in April, as customers rushed to buy iPhones and Macs amid fears of tariff hikes. That preemptive buying is estimated to have contributed about one percentage point to Apple’s overall 10% revenue growth. It’s a short-term gain that could weigh on future quarters if demand settles.

Apple is also highlighting its $500 billion US investment pledge as a hedge against geopolitical risk. Long-term projects include a manufacturing training hub in Detroit and scaled-up production of components like iPhone glass and Face ID modules within the US. These initiatives are clearly aimed at future resilience but won’t shift the tariff calculus in the near term.

AI Spending Climbs, But Apple Still Trails Rivals

Artificial intelligence was another focal point in the earnings call. CEO Tim Cook called AI “one of the most profound technologies of our lifetime” and said Apple is significantly ramping up its investment. A large chunk of that spending is going into private cloud infrastructure designed to support Apple Intelligence, the company’s new AI platform.

A redesigned, more personalized Siri is slated for rollout in 2026 alongside iOS 26, macOS 26, and iPadOS 26. Developer interest appears strong based on early beta feedback. But Apple’s AI push remains relatively slow-moving. Analysts like Dan Ives at Wedbush continue to press Apple to accelerate, possibly through larger acquisitions. Cook says the company is open to buying firms that help fast-track its AI roadmap, but so far, its M&A activity has stayed small and selective.

Execution Over Hype: Apple Delivers, but Risks Remain

Despite the ongoing noise around tariffs and the pace of AI development, Apple managed to grow across every geographic segment, extend its active installed base, and deliver its strongest June quarter in revenue terms since 2021. Shares were up roughly 3% in after-hours trading.

Looking ahead, Apple is forecasting mid-to-high single-digit revenue growth for the September quarter, with Services expected to remain a key driver. But tariff uncertainty, sustained competition in China, and questions about the scale of Apple’s AI ambitions are still hanging over the narrative. For now, the iPhone 16 is doing most of the work, and it’s enough.

Would higher iPhone prices or slower AI updates affect your next Apple upgrade? Let us know in the comments.