Apple revenues in Q1 2025 (fiscal Q2 2025) grew 5% YoY reaching US$ 95.3 billion. The growth was driven by both hardware (3% YoY) and Services (12%) YoY. This was the fourth consecutive quarter where both hardware and services showed growth. Services also reached an all-time revenue record.

Source: Counterpoint Research Apple 360

Commenting on the results, Tarun Pathak, Director at Counterpoint Research noted, “There were multiple issues unfolding this quarter. Facing an impending tariff deadline on goods from China, Apple mitigated potential financial impact by successfully shifting its U.S. import sources to other regions like India. The launch of the iPhone 16e, new Macs and iPads, all helped drive positive revenues. And then there were the China subsidies, however these were targeted towards the mid-tier smartphone market, which meant only a few models of iPhones and some Macs received both subsidy and channel discounts. Nevertheless, this was insufficient to offset a seventh consecutive quarter of Greater China revenue decline. Services continued their strong growth, reaching a record, despite the continued lack of a full delivery of promised AI features”.
Pathak further added, “Be it China subsidies or the tariff situation, the March quarter was about managing difficult externalities. Apple’s strong supply chain and diversified portfolio helped it navigate the challenges, at least for now.”

In terms of new launches, the iPhone 16e, has been well received in Japan, which was the largest volume driver during the quarter. This helped Japan become the fastest growing region for Apple. Both iPad and Mac revenues also saw double digit YoY growth driven by new model launches.

The tariff jolt has rekindled the importance of supply chain diversification, especially in India. Apple also mentioned in its earnings, that for the June quarter, the majority of iPhones coming to the US will be sourced from India, while other products like iPad, Mac, Watch will be sourced from Vietnam. Commenting on this Prachir Singh, Senior Analyst, leading manufacturing services at Counterpoint Research noted, "Apple has been doing a lot of groundwork in India which has helped it successfully manage some of the US iPhone demand from its India production facilities. In terms of capacity, India has enough to potentially meet all US iPhone demand in future, but the ecosystem needs to be ramped up. We will see more efforts towards this as well as products beyond iPhones. We expect made-in-India iPhones to account for 25%-30% of global iPhone shipments in 2025, as compared to 18% in 2024."

While Apple has managed its March quarter well, uncertainties remain. Varun Mishra, Senior Analyst at Counterpoint research noted, “Strong end of quarter shipments has helped Apple to build some inventory in the US to navigate near-term uncertainties. However, the upcoming quarters will truly test Apple's supply chain prowess and provide a clearer view of how tariff-related economic pressures are affecting consumer demand. If tariffs continue to weigh on its supply chain, Apple may need to take some tough strategic decisions like price increases for its customers, take a short-term hit on the bottom line or further scale production in countries like India”.