A few days ago, Apple released the results for its 2025 fiscal first quarter (which ran from September 29, 2024, to December 28, 2024, and did not actually include any days from calendar year 2025) and held a call with analysts to discuss the results. The fiscal first quarter is always Apple's best quarter of the year because it includes holiday sales. This time, the fiscal first quarter was also Apple's best fiscal quarter of all time, with a record revenue of $124.3 billion. That's up 4% from a year ago, and it beats the previous all-time record set three years ago. As always, I'm not all that interested in the financial details. What interests me is that this is one of four times a year when Apple provides some indication of how well its products are selling and answers questions from a bunch of analysts, so I'm always curious to see what Apple has to say about the iPhone and iPad and related technologies. If you want to get all of the nitty-gritty details, you can listen to the audio from the announcement conference call on the Apple website, or you can read a transcript of the call prepared by Jason Snell of Six Colors. Snell also created a number of useful charts that put Apple's financial announcements in perspective over time. Apple's official press release is here. Here are the items that stood out to me.
iPhone
- iPhone revenue was $69.1 billion. This was the third-best iPhone quarter ever. iPhone revenue was $71.6 billion three years ago (that one was the record), and it was $69.7 billion one year ago.
- Although Apple always declines to discuss upcoming and unannounced products during these financial calls, sometimes, the analysts try anyway. This time, one analyst asked Apple CEO Tim Cook if there was any room left for innovation on the "form-factor" of the iPhone or if Apple planned to stay consistent with the current lineup. This was a not-so-subtle attempt to get Cook to say whether we would see a radical new design, such as an iPhone that is super-thin and/or foldable. Cook's response was: "I think there’s a lot more to come, and I could not feel more optimistic about our product pipeline. So I think there’s a lot of innovation left on the smartphone." I guess perhaps that indicates that something new might be coming, but that language is certainly pretty vague.
- Cook said that an all-time record number of people upgraded their iPhone in the last quarter and noted that there were "compelling reasons to upgrade" for many folks.
iPad
- iPad revenue was $8.1 billion. The record was set two years ago ($9.4 billion). One year ago, the number was down to $7 billion, but I thought that was still an impressive number considering that Apple didn't introduce any new iPad models in 2023. In 2024, there were some great new iPads introduced, so there were lots of good choices during the holiday buying season.
- Why was iPad revenue higher this year? Some people thought it might be because of the new iPad Pro with an M4 processor, but Cook said that it was more driven by the iPad Air and the entry-level iPad. That doesn't surprise me. Although I love my M4 iPad Pro, for most of the people who ask me for buying advice, I think that the iPad Air is the sweet spot: it is cheaper than the Pro, but still a powerful device that includes many of the features that used to only come with the Pro model.
Other
- Cook was asked what effect the Trump administration's tariffs would have on Apple. His answer: "We are monitoring the situation and don’t have anything more to add than that."
- Once again, profit in Apple's services sector (which includes Apple TV+, but also a whole lot more) was at an all-time high of $26.3 billion. And I'm sure that was part of the reason that Apple's gross margin was also at an all-time high of 46.9%.