Apple has reported an increase in revenue for the first quarter of 2025, even as iPhone sales in China saw a significant decline.
Strong financial performance despite iPhone sales dip
Apple’s latest earnings report revealed a 4% increase in revenue, reaching US$124.3 billion, surpassing Wall Street expectations. The company also reported a net income of US$36.33 billion, a 7.1% rise from US$33.92 billion in the same period last year.
However, iPhone sales struggled in China, dropping by 11.1% to US$18.51 billion. This marks the largest decline in the region since the nearly 13% dip recorded in Q1 2024. Apple faces growing competition from local manufacturers such as Oppo, Vivo, and Huawei. The latter has made a strong comeback in the Chinese market after experiencing a sharp decline due to U.S. trade restrictions imposed during the first Trump administration.
Apple Intelligence rollout challenges
Speaking to CNBC, Apple CEO Tim Cook acknowledged that Apple Intelligence, the company’s new generative AI platform, has contributed to the uneven performance of the iPhone 16. The platform, a key selling point for the iPhone 16, is available only in select English-speaking markets, including Australia, Canada, Ireland, New Zealand, South Africa, the U.K., and the U.S.
“During the December quarter, we saw that in markets where we had rolled out Apple Intelligence, the year-over-year performance on the iPhone 16 family was stronger than in those markets where we had not,” Cook stated.
Apple has confirmed that Chinese language support will arrive later in the year, but it remains uncertain if the feature will be available in mainland China. Regulatory approvals and security restrictions pose significant challenges for Apple Intelligence in the region. Reports suggest that Apple had planned to integrate AI features in China through a partnership with tech giant Baidu, but this collaboration has stalled.
Services and Mac sales drive growth
Despite the slowdown in the iPhone, Apple saw strong growth in other areas. Mac and iPad sales increased by 15% in the quarter, driven by the launch of new devices, including the iPad Mini, iMac, Mac Mini, and MacBook Pro. Meanwhile, Apple’s Services division, which includes Apple TV+, Apple Music, and iCloud, saw a 14% increase in revenue.
The company now boasts an installed base of 2.35 billion active devices, up from 2.2 billion a year ago. Additionally, Cook highlighted that Apple has surpassed 1 billion subscriptions across its content and third-party app offerings.
While Apple faces challenges in China, its financial performance has exceeded analyst expectations. The company’s cautious approach to generative AI has also helped shield it from the market volatility caused by the recent launch of DeepSeek R1’s AI platform, which impacted major tech firms like Nvidia.
