iPhone sales in India hit quarterly high, fuelling Apple’s record quarter

Apple recorded double-digit growth in iPhone sales in India, setting a new revenue record for the month of June in the country. The surge contributed to the tech giant’s strongest global quarterly performance in 14 quarters, driven primarily by surging iPhone demand.

Although Apple’s sales in India span multiple channels, the company has made no secret of its growing focus on retail in the country. In April 2023, Apple opened its first two flagship stores in Delhi and Mumbai, marking a major milestone in its India strategy. It plans to expand further with four stores in Pune, Bengaluru, Delhi-NCR, and Mumbai.

“In retail, we continue to find opportunities in emerging markets to connect with even more customers… We couldn’t be more excited to open new stores in the UAE and India later this year,” Apple CEO Tim Cook said, during the earnings call.

While iPhone sales in India are soaring and local assembly is on the rise, import duties on components, and lingering uncertainty over US trade measures like tariffs, threaten to complicate Apple’s push to scale up manufacturing in India and export those handsets back to the United States.

According to Cook, a majority of iPhones sold in the US now list India as their country of origin.

Cook noted that the tariff landscape remains in flux, revealing that Apple faced around $800 million in tariff-related costs during the June quarter. If current global tariff rates and policies hold steady through September, the company expects an additional impact of approximately $1.1 billion.

Overall performance

The California-based company reported a 9.6% year-over-year (YoY) jump in revenue, raking in $94 billion for the third quarter of fiscal year 2025 (Q3 FY25), which ended on 28 June.

Apple expects total revenue in the September quarter (Q4 FY25) to grow in the “mid to high single digits” YoY.

The iPhone maker’s bottom line surged 9.3% YoY to $23.4 billion in Q3 FY25.

Apple’s flagship iPhones continued to power the company’s performance, with global iPhone sales surging 13.4% YoY in the third quarter to reach $44.6 billion—the strongest growth in 15 quarters.

“This strong broad-based performance was driven by the incredible popularity of the iPhone 16 family, which was up strong double digits year over year as compared to the 15 family,” Cook said, adding that the company recently reached a major milestone, having shipped its three billionth iPhone since the device first launched in February 2007.

Meanwhile, Apple’s services segment continues its steady ascent, cementing its role as a key revenue driver. In the third quarter, services revenue hit an all-time high of $27.4 billion, up 13.3% YoY. 

Apple expects services revenue to grow at a year-over-year rate similar to what itreported in the June-ended quarter.

“Customer engagement across our services offerings also continued to grow. Both transacting and paid accounts reached new all-time highs, with paid accounts growing double digits year over year. Paid subscriptions also grew double digits,” said Apple CFO Kevan Parekh, adding that the company now boasts over one billion paid subscriptions across its services platform.

Mac sales also surged in the quarter, soaring 14.8% YoY to $8 billion, fuelled largely by strong demand for the new M4 MacBook Air.

“We set a June record for upgraders on Mac, and we saw great performance in emerging markets with strong double digit growth on revenue as well as strong double digit growth on both upgraders and customers new to Mac,” Cook noted.

Despite strong growth in several categories, iPad and wearables sales saw a decline in the quarter. iPad revenue fell 8.1% YoY to $6.6 billion, while sales in the wearables, home, and accessories segment dropped 8.6% to $7.4 billion. However, total product revenue for the June quarter rose 8.2% YoY, reaching $66.6 billion.

AI developments

Although Apple has unveiled a slate of AI-powered features, ranging from on-device language models to enhanced photo editing tools, several of these innovations remain unavailable to users. Notably, the much-anticipated Siri upgrades announced at the Worldwide Developers Conference, including more natural conversational capabilities and on-device processing, are yet to be rolled out in a public software update.

“We see AI as one of the most profound technologies of our lifetime. We are embedding it across our devices and platforms and across the company,” Cook said, adding that the company is making good progress on a more personalised Siri and expects to release these features next year.

Apple’s chief also stressed that the company is ramping up its investment in AI. 

“We are significantly growing our investment. We did during the June (quarter). We will again in the September (quarter)... We are also reallocating a fair number of people to focus on AI features within the company… and we are putting all of our energy behind it,” he remarked.

He added, “We have acquired around seven companies this year, and that’s companies from all walks of life, not all AI oriented… We are very open to M&A that accelerates our road map. We are not stuck on a certain size company, although the ones that we have acquired thus far this year are small in nature.”

Unlike peers such as Microsoft, Alphabet, Meta and Amazon, each ploughing tens of billions into AI-dedicated servers and data-centre expansions, Apple’s capital expenditure has been largely directed towards manufacturing capacity, retail roll-out, and existing operations, with some AI-specific investments.

But that’s beginning to change. As Cook noted, and CFO Parekh underscored, Apple’s capital spending is set to rise. “It’s not going to be exponential growth, but it is going to grow substantially. And a lot of that’s a function of the investments we are making in AI,” said Parekh.