Apple Q1 2026 Apple Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Apple Inc Earnings Call
Issue, Hosny, Chandra Molly, director of investor relations.
Today's call is being recorded.
Speaking first today is Apple's CEO, Tim Cook and he'll be followed by CFO, Kevin perk.
After that, we'll open the call to questions from analysts.
Speaker #1: Good afternoon, and welcome to the Apple Q1 fiscal year 2026 earnings conference call. My name is Suhasini Chandramouli, Director of Investor Relations. Today's call is being recorded.
Suhasini Chandramouli: Good afternoon, and welcome to the Apple Q1 Fiscal Year 2026 Earnings Conference Call. My name is Suhasini Chandramouli, Director of Investor Relations. Today's call is being recorded. Speaking first today is Apple's CEO, Tim Cook, and he'll be followed by CFO, Kevan Parekh. After that, we'll open the call to questions from analysts. Please note that some of the information you'll hear during our discussion today will consist of forward-looking statements, including, without limitation, those regarding revenue, gross margin, operating expenses, other income and expense, taxes, capital allocation, and future business outlook. These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast, including risks related to the potential impact to the company's business and results of operations from macroeconomic conditions, tariffs and other measures, and legal and regulatory proceedings.
Suhasini Chandramouli: Good afternoon, and welcome to the Apple Q1 Fiscal Year 2026 Earnings Conference Call. My name is Suhasini Chandramouli, Director of Investor Relations. Today's call is being recorded. Speaking first today is Apple's CEO, Tim Cook, and he'll be followed by CFO, Kevan Parekh. After that, we'll open the call to questions from analysts. Please note that some of the information you'll hear during our discussion today will consist of forward-looking statements, including, without limitation, those regarding revenue, gross margin, operating expenses, other income and expense, taxes, capital allocation, and future business outlook. These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast, including risks related to the potential impact to the company's business and results of operations from macroeconomic conditions, tariffs and other measures, and legal and regulatory proceedings.
Please note that some of the information you'll hear during our discussion today will consist of forward-looking statements including without limitation those regarding Revenue. Growth margin operating expenses, other income and expense taxes, Capital allocation, and future business Outlook.
Speaker #1: Speaking first today is Apple CEO Tim Cook, and he'll be followed by CFO Kevan Parekh. After that, we'll open the call to questions from analysts.
Speaker #1: Please note that some of the information you'll hear during our discussion today will consist of forward-looking statements, including, without limitation, those regarding revenue, gross margin, operating expenses, other income and expense, taxes, capital allocation, and future business outlook.
These statements involve risks and uncertainties that may cause actual results or Trends to differ materially from our forecasts, including risks related to the potential impact to the company's business and results of operations from macroeconomic conditions, tariffs and other measures and legal, and Regulatory proceedings.
Speaker #1: These statements involve risks and uncertainties that may cause actual results or trends to differ materially from our forecast, including risks related to the potential impact to the company's business and results of operations from macroeconomic conditions, tariffs, and other measures, and legal and regulatory proceedings.
For more information, please refer to the risk factors discussed in Apple's, most recently filed reports on form 10q and form 10 K and the Form 8K filed with the SEC today, along with the associated press release.
Speaker #1: For more information, please refer to the Risk Factors discussed in Apple's most recently filed reports on Form 10Q and Form 10K and the Form 8K filed with the SEC today along with the Associated Press release.
Suhasini Chandramouli: For more information, please refer to the risk factors discussed in Apple's most recently filed reports on Form 10-Q, Form 10-K, and the Form 8-K filed with the SEC today, along with the associated press release. Additional information will also be in our report on Form 10-Q for the quarter ended December 27, 2025, to be filed tomorrow, and in other reports and filings we make with the SEC. Apple assumes no obligation to update any forward-looking statements which speak only as of the date they are made. I'd now like to turn the call over to Tim for introductory remarks.
For more information, please refer to the risk factors discussed in Apple's most recently filed reports on Form 10-Q, Form 10-K, and the Form 8-K filed with the SEC today, along with the associated press release. Additional information will also be in our report on Form 10-Q for the quarter ended December 27, 2025, to be filed tomorrow, and in other reports and filings we make with the SEC. Apple assumes no obligation to update any forward-looking statements which speak only as of the date they are made. I'd now like to turn the call over to Tim for introductory remarks.
Additional information will also be in our report on form 10q for the quarter ended. December 27th 2025 to be filed tomorrow and in other reports and filings, we make with the SEC Apple assumes, no obligation to update any forward-looking statements, which speak only as of the date. They are made.
I'd now like to turn the call over to Tim for introductory remarks.
Thank you, sue Hassani. Good afternoon everyone, and thanks for joining the call.
Speaker #1: Additional information will also be in our report on Form 10-Q for the quarter ended December 27, 2025, to be filed tomorrow, and in other reports and filings we make with the SEC.
I am proud to say that we just had a quarter for the record books. We are reporting our best ever quarter with 143.8 billion dollars in Revenue up 16% from a year ago and exceeding our expectations
Speaker #1: Apple assumes no obligation to update any forward-looking statements, which speak only as of the date they are made. I'd now like to turn the call over to Tim for
The demand for iPhone was, simply staggering with Revenue, growing 23% year-over-year and all-time records across every Geographic segments.
Speaker #1: introductory remarks. Thank
Speaker #2: You, Suhasini. Good afternoon, everyone, and thanks for joining the call. I am proud to say that we just had a quarter for the record books.
Tim Cook: Thank you, Suhasini. Good afternoon, everyone, and thanks for joining the call. I am proud to say that we just had a quarter for the record books. We are reporting our best-ever quarter with $143.8 billion in revenue, up 16% from a year ago and exceeding our expectations. The demand for iPhone was simply staggering, with revenue growing 23% year over year and all-time records across every geographic segment. Services set an all-time revenue record as well, up 14% from a year ago, and EPS reached an all-time record of $2.84, growing a robust 19% year over year. We set all-time revenue records in the Americas, Europe, Japan, and rest of Asia-Pacific, and grew in the vast majority of markets we track.
Tim Cook: Thank you, Suhasini. Good afternoon, everyone, and thanks for joining the call. I am proud to say that we just had a quarter for the record books. We are reporting our best-ever quarter with $143.8 billion in revenue, up 16% from a year ago and exceeding our expectations. The demand for iPhone was simply staggering, with revenue growing 23% year over year and all-time records across every geographic segment. Services set an all-time revenue record as well, up 14% from a year ago, and EPS reached an all-time record of $2.84, growing a robust 19% year over year. We set all-time revenue records in the Americas, Europe, Japan, and rest of Asia-Pacific, and grew in the vast majority of markets we track.
Services is set on all-time Revenue record as well up 14% from a year ago and EPS reached an all-time record of $2.84 growing a robust 19% year-over-year.
Speaker #2: We are reporting our best ever quarter with 143.8 billion dollars in revenue up 16% from a year ago and exceeding our expectations. The demand for iPhone was simply staggering, with revenue growing 23% year over year and all-time records across every geographic segment.
We set all-time Revenue records in the Americas, Europe, Japan and rest of Asia Pacific and grew in the vast. Majority of markets, we track
we continue to gain momentum and Emerging Markets, which includes India, where we saw, strong double-digit, Revenue growth,
Speaker #2: Services has set an all-time revenue record as well, up 14% from a year ago, and EPS reached an all-time record of $2.84, growing a robust 19% year over year.
Greater China, also grew 38% year-over-year driven by iPhone which had record upgraders and double-digit growth on switchers.
Speaker #2: We set all-time revenue records in the Americas, Europe, Japan, and Rest of Asia Pacific, and grew in the vast majority of markets we track.
Apple's December quarter results, underscore our Relentless commitment, to Innovation to our customers, and to our mission, to build the best products and services in the world.
Speaker #2: We continue to gain momentum in emerging markets, which includes India, where we saw strong double-digit revenue growth. Greater China also grew 38% year over year, driven by iPhone, which had record upgraders and double-digit growth on switchers.
Tim Cook: We continue to gain momentum in emerging markets, which includes India, where we saw strong double-digit revenue growth. Greater China also grew 38% year-over-year, driven by iPhone, which had record upgraders and double-digit growth on switchers. Apple's December quarter results underscore our relentless commitment to innovation, to our customers, and to our mission to build the best products and services in the world. Now I'd like to take a closer look at results from across our lineup, beginning with iPhone. As I mentioned earlier, it was a fantastic quarter for iPhone, with an all-time revenue record of $85.3 billion, up 23% year-over-year. This is the strongest iPhone lineup we've ever had, and by far the most popular. Throughout the quarter, customer enthusiasm for iPhone was simply extraordinary. Users were incredibly excited about everything it enables them to do.
We continue to gain momentum in emerging markets, which includes India, where we saw strong double-digit revenue growth. Greater China also grew 38% year-over-year, driven by iPhone, which had record upgraders and double-digit growth on switchers. Apple's December quarter results underscore our relentless commitment to innovation, to our customers, and to our mission to build the best products and services in the world. Now I'd like to take a closer look at results from across our lineup, beginning with iPhone. As I mentioned earlier, it was a fantastic quarter for iPhone, with an all-time revenue record of $85.3 billion, up 23% year-over-year. This is the strongest iPhone lineup we've ever had, and by far the most popular. Throughout the quarter, customer enthusiasm for iPhone was simply extraordinary. Users were incredibly excited about everything it enables them to do.
Now, I'd like to take a closer look at results from across our lineup, beginning with iPhone,
As I mentioned earlier, it was a fantastic quarter for iPhone with an all-time Revenue record of 85.3 billion up 23% year-over-year.
Speaker #2: Apple's December quarter results underscore our relentless commitment to innovation, to our customers, and to our mission to build the best products and services in the world.
Is the strongest iPhone lineup we've ever had. And by far the most popular throughout the quarter, customer enthusiasm for iPhone was simply extraordinary.
Users were incredibly excited about everything. Enables them to do.
Speaker #2: Now I'd like to take a closer look at results from across our lineup, beginning with iPhone. As I mentioned earlier, it was a fantastic quarter for iPhone, with an all-time revenue record of $85.3 billion up 23% year over year.
IPhone 17 Pro and 17 Pro Max deliver, the ultimate iPhone experience. They feature the best ever performance and battery life on an iPhone, the most advanced camera system, and a striking design.
Speaker #2: This is the strongest iPhone lineup we've ever had, and by far the most popular. Throughout the quarter, customer enthusiasm for iPhone was simply extraordinary.
IPhone are are slimmest and lightest smartphone, yet packs, powerful capabilities into an ultra slim and Sleek design. And iPhone 7 is a truly fantastic upgrade at an incredible value.
Speaker #2: Users were incredibly excited about everything it enables them to do. iPhone 17 Pro and 17 Pro Max deliver the ultimate iPhone experience. They feature the best-ever performance and battery life on an iPhone, the most advanced camera system, and a striking design.
Tim Cook: iPhone 17 Pro and iPhone 17 Pro Max deliver the ultimate iPhone experience. They feature the best-ever performance and battery life on an iPhone, the most advanced camera system, and a striking design. iPhone Air, our slimmest and lightest smartphone yet, packs powerful capabilities into an ultra-slim and sleek design. iPhone 17 is a truly fantastic upgrade and an incredible value. Turning to Mac, revenue was $8.4 billion for the December quarter. We were pleased to see the Mac install base reach another all-time high, with nearly half of customers who purchased a Mac being new to the product. The M5-powered 14-inch MacBook Pro takes a huge leap in AI performance, thanks to the next-generation GPU architecture and a faster Neural Engine.
iPhone 17 Pro and iPhone 17 Pro Max deliver the ultimate iPhone experience. They feature the best-ever performance and battery life on an iPhone, the most advanced camera system, and a striking design. iPhone Air, our slimmest and lightest smartphone yet, packs powerful capabilities into an ultra-slim and sleek design. iPhone 17 is a truly fantastic upgrade and an incredible value. Turning to Mac, revenue was $8.4 billion for the December quarter. We were pleased to see the Mac install base reach another all-time high, with nearly half of customers who purchased a Mac being new to the product. The M5-powered 14-inch MacBook Pro takes a huge leap in AI performance, thanks to the next-generation GPU architecture and a faster Neural Engine.
Turning to Mac Revenue was 8.4 billion for the December quarter. We were pleased to see the Mac install base. Reach another all-time high with nearly half of customers. Who purchased the Mac being new to the product.
Speaker #2: iPhone Air, our slimmest and lightest smartphone yet, packs powerful capabilities into an ultra-slim and sleek design. An iPhone 17 is a truly fantastic upgrade, and an incredible value.
The M5 powered 14-inch, MacBook Pro takes a huge leap in AI performance. Thanks to the Next Generation GPU architecture and a faster. Neural engine.
Speaker #2: Turning to Mac, revenue was $8.4 billion for the December quarter. We were pleased to see the Mac install base reach another all-time high, with nearly half of customers who purchased the Mac being new to the product.
In our lineup has something special to offer users.
Speaker #2: The M5-powered 14-inch MacBook Pro takes a huge leap in AI performance, thanks to the next generation GPU architecture and a faster neural engine. From the world's most popular laptop for consumers and businesses in MacBook Air to the small and spectacular Mac Mini, every Mac in our lineup has something special to offer users.
And with the recently released Apple Creator studio available across Mac, iPad and iPhone creators have more tools at their fingertips to make incredible music or turn their devices into a video production Studio.
Tim Cook: From the world's most popular laptop for consumers and businesses in MacBook Air to the small and spectacular Mac Mini, every Mac in our lineup has something special to offer users. With the recently released Apple Creator Studio, available across Mac, iPad, and iPhone, creators have more tools at their fingertips to make incredible music or turn their devices into a video production studio. Meanwhile, iPad saw December quarter revenue of $8.6 billion, up 6% from a year ago, with an all-time record for upgraders. We are proud to have our strongest lineup ever, from iPad powered by A16, which is proving to be incredibly popular, to iPad Air, with its amazing versatility, to the unbelievably powerful M5 iPad Pro, with its remarkably thin and light design. It's no wonder that iPad continued to be the most popular tablet in the world.
From the world's most popular laptop for consumers and businesses in MacBook Air to the small and spectacular Mac Mini, every Mac in our lineup has something special to offer users. With the recently released Apple Creator Studio, available across Mac, iPad, and iPhone, creators have more tools at their fingertips to make incredible music or turn their devices into a video production studio. Meanwhile, iPad saw December quarter revenue of $8.6 billion, up 6% from a year ago, with an all-time record for upgraders. We are proud to have our strongest lineup ever, from iPad powered by A16, which is proving to be incredibly popular, to iPad Air, with its amazing versatility, to the unbelievably powerful M5 iPad Pro, with its remarkably thin and light design. It's no wonder that iPad continued to be the most popular tablet in the world.
Speaker #2: And with the recently released Apple Creator Studio, available across Mac, iPad, and iPhone, creators have more tools at their fingertips to make incredible music or turn their devices into a video production studio.
Meanwhile, iPad saw December quarter revenue of 8.6 billion dollars up 6% from a year ago with an all-time record for upgraders. We are proud to have our strongest lineup ever from iPad, powered by a 16 which is proving to be incredibly popular to iPad Air with its amazing versatility to the unbelievably powerful. M5 iPad Pro with its remarkably thin and light design.
It's no wonder that iPad continue to be the most popular tablet in the world.
Speaker #2: Meanwhile, iPad saw December quarter revenue of $8.6 billion, up 6% from a year ago, with an all-time record for upgraders. We are proud to have our strongest lineup ever, from iPad powered by A16, which is proving to be incredibly popular, to iPad Air with its amazing versatility, to the unbelievably powerful M5 iPad Pro with its remarkably thin and light design.
Across wearables home and accessories. Revenue was 11.5 billion with Apple, watch Ultra, 3 and Apple. Watch series 11. Users are tapping into a comprehensive set of Health and Wellness features to help them meet their health goals.
In a recent survey, we see an increasing number of users telling us, they're wearing their watch to sleep, which allows them to check their sleep scores, each morning and find ways to improve their sleep quality.
Speaker #2: It's no wonder that iPad continued to be the most popular tablet in the world. Across wearables, home, and accessories, revenue was $11.5 billion. With Apple Watch Ultra 3 and Apple Watch Series 11, users are tapping into a comprehensive set of health and wellness features to help them meet their health goals.
Tim Cook: Across wearables, home, and accessories, revenue was $11.5 billion. With Apple Watch Ultra 3 and Apple Watch Series 11, users are tapping into a comprehensive set of health and wellness features to help them meet their health goals. In a recent survey, we see an increasing number of users telling us they're wearing their watch to sleep, which allows them to check their sleep scores each morning and find ways to improve their sleep quality. Apple Watch alerts are enabling important conversations between users and their doctors regarding potential signs of hypertension. These are just some of the many ways that Watch is helping people live healthier lives. The response to AirPods Pro 3 has been amazing. Customers are raving about the rich, immersive sound quality, the unmatched level of active noise cancellation, and the noticeably improved comfort that makes them effortless to wear.
Across wearables, home, and accessories, revenue was $11.5 billion. With Apple Watch Ultra 3 and Apple Watch Series 11, users are tapping into a comprehensive set of health and wellness features to help them meet their health goals. In a recent survey, we see an increasing number of users telling us they're wearing their watch to sleep, which allows them to check their sleep scores each morning and find ways to improve their sleep quality. Apple Watch alerts are enabling important conversations between users and their doctors regarding potential signs of hypertension. These are just some of the many ways that Watch is helping people live healthier lives. The response to AirPods Pro 3 has been amazing. Customers are raving about the rich, immersive sound quality, the unmatched level of active noise cancellation, and the noticeably improved comfort that makes them effortless to wear.
Speaker #2: In a recent survey, we see an increasing number of users telling us they're wearing their watch to sleep, which allows them to check their sleep scores each morning and find ways to improve their sleep quality.
And Apple watch alerts are enabling important conversations between users and their doctors regarding potential signs of hypertension. These are just some of the many ways that watch is helping people live healthier lives the response to airpods. Pro 3 has been amazing, customers are raving about the rich immersive sound quality. The unmatched level of active noise cancellation and the noticeably improved comfort that makes them effortless to wear.
Speaker #2: An Apple Watch alerts are enabling important conversations between users and their doctors, regarding potential signs of hypertension. These are just some of the many ways that watches helping people live healthier lives.
Features like live translation are also changing the way people can communicate by helping users connect across languages in real time and making everyday conversations, feel more natural and accessible.
Speaker #2: The response to AirPods Pro 3 has been amazing. Customers are raving about the rich, immersive sound quality, the unmatched level of active noise cancellation, and the noticeably improved comfort that makes them effortless to wear.
Together these Innovations create an experience that feels both powerful and personal. And the enthusiasm we are seeing reflects just how strongly airpods Pro 3 are resonating with customers,
Speaker #2: Features like live translation are also changing the way people can communicate, by helping users connect across languages in real time and making everyday conversations feel more natural and accessible.
Tim Cook: Features like Live Translation are also changing the way people can communicate by helping users connect across languages in real time and making everyday conversations feel more natural and accessible. Together, these innovations create an experience that feels both powerful and personal, and the enthusiasm we are seeing reflects just how strongly AirPods Pro 3 are resonating with customers. Across our product categories, we are seeing very high levels of customer satisfaction, and we are proud to report that we have a new record for our installed base, with more than 2.5 billion active devices. During the quarter, we were excited to see that the majority of users on enabled iPhones are actively leveraging the power of Apple Intelligence. Since the launch of Apple Intelligence, we've introduced dozens of features, including writing tools and cleanup, and made it available in 15 languages.
Features like Live Translation are also changing the way people can communicate by helping users connect across languages in real time and making everyday conversations feel more natural and accessible. Together, these innovations create an experience that feels both powerful and personal, and the enthusiasm we are seeing reflects just how strongly AirPods Pro 3 are resonating with customers. Across our product categories, we are seeing very high levels of customer satisfaction, and we are proud to report that we have a new record for our installed base, with more than 2.5 billion active devices. During the quarter, we were excited to see that the majority of users on enabled iPhones are actively leveraging the power of Apple Intelligence. Since the launch of Apple Intelligence, we've introduced dozens of features, including writing tools and cleanup, and made it available in 15 languages.
Across our product categories, we are seeing very high levels of customer satisfaction and we are proud to report that we have a new record for our installed base with more than 2.5 billion active devices.
Speaker #2: Together, these innovations create an experience that feels both powerful and personal, and the enthusiasm we are seeing reflects just how strongly AirPods Pro 3 are resonating with customers.
During the quarter, we were excited to see that the majority of users on enabled. IPhones are actively leveraging. The power of Apple intelligence, since the launch of Apple intelligence, we've introduced dozens of features, including writing, tools, and cleanup, and made it available in 15 languages.
Speaker #2: Across our product categories, we are seeing very high levels of customer satisfaction, and we are proud to report that we have a new record for our installed base, with more than 2.5 billion active devices.
These AI experiences are personal private integrated across our platforms and relevant to what our users do every day.
Speaker #2: During the quarter, we were excited to see that the majority of users on enabled iPhones are actively leveraging the power of Apple Intelligence. Since the launch of Apple Intelligence, we've introduced dozens of features, including writing tools and cleanup, and made it available in 15 languages.
We are bringing intelligence to more of what people already love about our products. So we can make every experience. Even more capable in effortless 1 of our most popular features is visual intelligence which helps users learn and do more than ever with the content on their iPhone screen, making it faster to search, take action and answer questions across their apps.
Speaker #2: These AI experiences are personal, private, integrated across our platforms, and relevant to what our users do every day. We are bringing intelligence to more of what people already love about our products, so we can make every experience even more capable and effortless.
Tim Cook: These AI experiences are personal, private, integrated across our platforms, and relevant to what our users do every day. We are bringing intelligence to more of what people already love about our products, so we can make every experience even more capable and effortless. One of our most popular features is Visual Intelligence, which helps users learn and do more than ever with the content on their iPhone screen, making it faster to search, take action, and answer questions across their apps. As I touched on earlier, we are hearing powerful stories of people using Live Translation to communicate seamlessly across languages. These are just some of the many powerful AI features that are enabling our users to do remarkable things with our products, which are far and away the best platforms in the world for AI.
These AI experiences are personal, private, integrated across our platforms, and relevant to what our users do every day. We are bringing intelligence to more of what people already love about our products, so we can make every experience even more capable and effortless. One of our most popular features is Visual Intelligence, which helps users learn and do more than ever with the content on their iPhone screen, making it faster to search, take action, and answer questions across their apps. As I touched on earlier, we are hearing powerful stories of people using Live Translation to communicate seamlessly across languages. These are just some of the many powerful AI features that are enabling our users to do remarkable things with our products, which are far and away the best platforms in the world for AI.
And as I touched on earlier, we are hearing powerful stories of people using live translation to communicate seamlessly across languages.
And these are just some of the many powerful AI features that are enabling our users to do remarkable things with our products, which are Far and Away the best Platforms in the world for AI.
Speaker #2: One of our most popular features is visual intelligence, which helps users learn and do more than ever with the content on their iPhone screen, making it faster to search, take action, and answer questions across their apps.
That's in no small part because of the extraordinary power and performance of Apple silicon.
Building on our efforts in the AI space. We are also collaborating with Google to develop the next generation of Apple Foundation models.
This will help power future. Apple intelligence features including a more personalized Theory coming this year.
We're incredibly excited for what's to come with so many new experiences to unlock.
Tim Cook: That's in no small part because of the extraordinary power and performance of Apple Silicon. Building on our efforts in the AI space, we are also collaborating with Google to develop the next generation of Apple foundation models. This will help power future Apple Intelligence features, including a more personalized Siri coming this year. We're incredibly excited for what's to come with so many new experiences to unlock. Turning to services, we achieved an all-time revenue record of $30 billion, 14% higher from a year ago. Services also set all-time revenue records in both developed and emerging markets. Apple TV has seen fantastic momentum, with December seeing a 36% increase in viewership over the previous year. It's no wonder with shows like Pluribus, which are creating landmark cultural moments that audiences are loving.
That's in no small part because of the extraordinary power and performance of Apple Silicon. Building on our efforts in the AI space, we are also collaborating with Google to develop the next generation of Apple foundation models. This will help power future Apple Intelligence features, including a more personalized Siri coming this year. We're incredibly excited for what's to come with so many new experiences to unlock. Turning to services, we achieved an all-time revenue record of $30 billion, 14% higher from a year ago. Services also set all-time revenue records in both developed and emerging markets. Apple TV has seen fantastic momentum, with December seeing a 36% increase in viewership over the previous year. It's no wonder with shows like Pluribus, which are creating landmark cultural moments that audiences are loving.
turning the services we achieved an all-time Revenue record of 30 billion dollars 14% higher from a year ago
Services also, set all-time Revenue records in both developed and Emerging Markets.
Apple TV has seen fantastic momentum with December seeing a 36% increase in viewership over the previous year.
Anticipation is building for upcoming new productions, like Cape Fear from Steven Spielberg and Martin Scorsese.
And we are thrilled to announce that. Ted lasso will be returning for a fourth season this summer.
6 years since launch, we're excited by the growing enthusiasm viewers have for Apple TV and we are grateful for the accolades that have followed most recently at the Critics Choice and Golden Globe Awards.
Tim Cook: Anticipation is building for upcoming new productions like Cape Fear from Steven Spielberg and Martin Scorsese, and we are thrilled to announce that Ted Lasso will be returning for a fourth season this summer. Six years since launch, we're excited by the growing enthusiasm viewers have for Apple TV, and we are grateful for the accolades that have followed, most recently at the Critics Choice and Golden Globe Awards. To date, Apple TV productions have earned more than 650 wins and more than 3,200 nominations, including a recently announced Oscar nomination for Best Picture for F1, the movie. And speaking of F1, we're also approaching the start of a new Formula One season, and for F1 fans in the US, Apple TV will be the place to watch every practice, qualifying, sprint, and Grand Prix.
Anticipation is building for upcoming new productions like Cape Fear from Steven Spielberg and Martin Scorsese, and we are thrilled to announce that Ted Lasso will be returning for a fourth season this summer. Six years since launch, we're excited by the growing enthusiasm viewers have for Apple TV, and we are grateful for the accolades that have followed, most recently at the Critics Choice and Golden Globe Awards. To date, Apple TV productions have earned more than 650 wins and more than 3,200 nominations, including a recently announced Oscar nomination for Best Picture for F1, the movie. And speaking of F1, we're also approaching the start of a new Formula One season, and for F1 fans in the US, Apple TV will be the place to watch every practice, qualifying, sprint, and Grand Prix.
To date, Apple TV Productions have earned more than 650 wins and more than 3,200 nominations including a recently announced Oscar nomination for best picture. For F1 the movie.
And speaking of F1, we're also approaching the start of a new Formula 1 season. And for F1 fans in the US, Apple TV will be the place to watch every practice qualifying Sprint and Grand Prix.
MLS fans will also be able to watch every regular and postseason game with their Apple TV subscription this year and we're looking forward to kick off in the coming weeks.
Looking back 2025 was a fantastic year for services, as we rolled out amazing new features and broke records.
Apple music climbed to all-time highs in both listenership and new subscriber growth.
Tim Cook: MLS fans will also be able to watch every regular and postseason game with their Apple TV subscription this year, and we're looking forward to kickoff in the coming weeks. Looking back, 2025 was a fantastic year for services as we rolled out amazing new features and broke records. Apple Music climbed to all-time highs in both listenership and new subscriber growth. Apple Pay eliminated more than $1 billion in fraud for our partners last year, and we've made it available in more markets than ever before. Last year, we welcomed more than 850 million users every week on average to the App Store, the world's safest and most innovative app marketplace. Developers have now earned more than $550 billion on our platform since 2008.
MLS fans will also be able to watch every regular and postseason game with their Apple TV subscription this year, and we're looking forward to kickoff in the coming weeks. Looking back, 2025 was a fantastic year for services as we rolled out amazing new features and broke records. Apple Music climbed to all-time highs in both listenership and new subscriber growth. Apple Pay eliminated more than $1 billion in fraud for our partners last year, and we've made it available in more markets than ever before. Last year, we welcomed more than 850 million users every week on average to the App Store, the world's safest and most innovative app marketplace. Developers have now earned more than $550 billion on our platform since 2008.
Apple pay eliminated more than 1 billion dollars in fraud for our partners last year. And we've made it available in more markets than ever before.
And last year we welcome more than 850 million users every week on average to the App Store, the world's safest and most Innovative app Marketplace.
Developers have now earned more than 50050 billion dollars on our platform since 2008.
In retail, we continue to bring a magical experience to our customers all around the world and we were thrilled to have our best ever results in retail during the quarter.
We were excited to open our fifth store in India in December and have plans to open another store in Mumbai soon.
Apple Pay eliminated more than $1 billion in fraud for our partners last year. And we've made it available in more markets than ever before.
Wherever we are, we see ourselves as part of a larger hole, that's why we show up with our values in everything we do.
And last year we welcomed more than 850 million users every week, on average, to the App Store, the world's safest and most innovative app marketplace.
Tim Cook: In retail, we continue to bring a magical experience to our customers all around the world, and we were thrilled to have our best-ever results in retail during the quarter… We were excited to open our fifth store in India in December and have plans to open another store in Mumbai soon. Wherever we are, we see ourselves as part of a larger whole. That's why we show up with our values in everything we do. That means working with partners in places like Vietnam to bring more clean water to rural areas. It means celebrating graduations of new classes of innovators from our developer academies in places such as Brazil, Indonesia, and South Korea. It means 3D printing titanium cases for Apple Watch using recycled materials, so that they're better for the planet without compromising quality, and so much more.
In retail, we continue to bring a magical experience to our customers all around the world, and we were thrilled to have our best-ever results in retail during the quarter… We were excited to open our fifth store in India in December and have plans to open another store in Mumbai soon. Wherever we are, we see ourselves as part of a larger whole. That's why we show up with our values in everything we do. That means working with partners in places like Vietnam to bring more clean water to rural areas. It means celebrating graduations of new classes of innovators from our developer academies in places such as Brazil, Indonesia, and South Korea. It means 3D printing titanium cases for Apple Watch using recycled materials, so that they're better for the planet without compromising quality, and so much more.
Developers have now earned more than 550 billion dollars on our platform since 2008.
That means working with Partners in places like Vietnam to bring more clean water to rural areas. It means celebrating graduations of new classes of innovators, from our developers, in places such as Brazil, Indonesia, and South Korea.
In retail, we continue to bring a magical experience to our customers all around the world, and we were thrilled to have our best-ever results in retail during the quarter.
It means 3D printing titanium cases for Apple watch using recycled materials, so that they're better for the planet without compromising quality.
And so much more.
We were excited to open our fifth store in India in December and have plans to open another store in Mumbai soon.
We're especially proud of the work. We're doing to support American innovation.
Wherever we are, we see ourselves as part of a larger hole, that's why we show up with our values in everything we do.
Last year, we committed to invest 600 billion dollars over 4 years in vital Industries like Advanced manufacturing, silicon engineering and artificial intelligence.
That means working with partners in places like Vietnam to bring more clean water to rural areas. It means celebrating graduations of new classes of innovators from our developer program, in places such as Brazil, Indonesia, and South Korea.
As we're building on our long-standing investments in America, we're supporting nearly half a million jobs with thousands of suppliers across all 50 states.
It means 3D printing titanium cases for Apple Watch using recycled materials, so that they're better for the planet without compromising quality.
Tim Cook: We're especially proud of the work we're doing to support American innovation. Last year, we committed to invest $600 billion over 4 years in vital industries like advanced manufacturing, silicon engineering, and artificial intelligence. As we're building on our long-standing investments in America, we're supporting nearly 500,000 jobs with thousands of suppliers across all 50 states. In the year since we made our initial commitment, we're making great progress. Today, we're shipping servers to power Apple Intelligence from our new manufacturing facility in Houston. Through our advanced manufacturing program, we're working with Corning in Kentucky to make 100% of cover glass for iPhone and Apple Watch.
We're especially proud of the work we're doing to support American innovation. Last year, we committed to invest $600 billion over 4 years in vital industries like advanced manufacturing, silicon engineering, and artificial intelligence. As we're building on our long-standing investments in America, we're supporting nearly 500,000 jobs with thousands of suppliers across all 50 states. In the year since we made our initial commitment, we're making great progress. Today, we're shipping servers to power Apple Intelligence from our new manufacturing facility in Houston. Through our advanced manufacturing program, we're working with Corning in Kentucky to make 100% of cover glass for iPhone and Apple Watch.
And so much more.
In the year, since we made our initial commitment. We're making great progress. Today, we're shipping servers to power Apple intelligence from our new manufacturing, facility in Houston.
We're especially proud of the work we're doing to support American innovation.
Through our Advanced manufacturing program, we're working with Corning in Kentucky to make a 100% of covered glass for iPhone and Apple watch.
Last year, we committed to invest $600 billion over 4 years in vital industries like advanced manufacturing, silicon engineering, and artificial intelligence.
As we're building on our long-standing investments in America, we're supporting nearly half a million jobs with thousands of suppliers across all 50 states.
We're working with Micron which broke ground on a new Advanced chip, packaging and test facility. And we continue to advance the development of an end-to-end silicon supply chain across the country sourcing, 20 billion US chips in 2025.
In the year, since we made our initial commitment. We're making great progress. Today, we're shipping servers to power Apple intelligence from our new manufacturing, facility in Houston.
Through our Apple Manufacturing Academy in Detroit, we're already Training American businesses and innovators on the latest smart manufacturing and artificial intelligence techniques.
Tim Cook: We're working with Micron, which broke ground on a new advanced chip packaging and test facility, and we continue to advance the development of an end-to-end silicon supply chain across the country, sourcing 20 billion US chips in 2025. Through our Apple Manufacturing Academy in Detroit, we're already training American businesses and innovators on the latest smart manufacturing and artificial intelligence techniques. Six months since opening, the academy is already making an enormously positive impact for businesses working alongside Apple engineers to drive productivity, efficiency, and quality in their supply chains. As I said at the beginning of my remarks, this was, in so many ways, a remarkable quarter for Apple, and we're excited for all the opportunities we'll have in the year ahead to deliver innovations that have never been seen before and enrich the lives of users every step of the way.
We're working with Micron, which broke ground on a new advanced chip packaging and test facility, and we continue to advance the development of an end-to-end silicon supply chain across the country, sourcing 20 billion US chips in 2025. Through our Apple Manufacturing Academy in Detroit, we're already training American businesses and innovators on the latest smart manufacturing and artificial intelligence techniques. Six months since opening, the academy is already making an enormously positive impact for businesses working alongside Apple engineers to drive productivity, efficiency, and quality in their supply chains. As I said at the beginning of my remarks, this was, in so many ways, a remarkable quarter for Apple, and we're excited for all the opportunities we'll have in the year ahead to deliver innovations that have never been seen before and enrich the lives of users every step of the way.
Through our Advanced Manufacturing program, we're working with Corning in Kentucky to make 100% of the cover glass for iPhone and Apple Watch.
6 months since opening. The academy is already making an enormously positive impact for businesses. Working alongside Apple Engineers to drive productivity, efficiency, and quality in their supply chains. As I said at the beginning of my remarks, this was in so many ways. I remarkable quarter for Apple.
We're working with Micron, which broke ground on a new advanced chip, packaging, and test facility. And we continue to advance the development of an end-to-end silicon supply chain across the country, sourcing 20 billion U.S. chips in 2025.
And we're excited for all the opportunities we'll have in the year ahead to deliver innovations. That have never been seen before and enriched the lives of users every step of the way.
Through our Apple Manufacturing Academy in Detroit, we're already training American businesses and innovators on the latest smart manufacturing and artificial intelligence techniques.
With so much to look forward to in the weeks and months ahead. I have every confidence that our best work is yet to come.
With that, I'll turn it over to Kevin.
Six months since opening, the academy is already making an enormously positive impact for businesses. Working alongside Apple engineers to drive productivity, efficiency, and quality in their supply chains.
As I said at the beginning of my remarks, this was in so many ways. I remarkable quarter for Apple.
Tim Cook: With so much to look forward to in the weeks and months ahead, I have every confidence that our best work is yet to come. With that, I'll turn it over to Kevan.
With so much to look forward to in the weeks and months ahead, I have every confidence that our best work is yet to come. With that, I'll turn it over to Kevan.
Year ahead to deliver innovations. That have never been seen before and enriched the lives of users, every step of the way.
Was up 16% year-over-year, our best quarter ever across the world. We set all-time Revenue records in both developed and emerging markets. And we saw a double-digit growth year-over-year across a majority of the markets. We track including the US Latin America Western Europe, greater China, India and South Asia.
With so much to look forward to in the weeks and months ahead, I have every confidence that our best work is yet to come.
Kevan Parekh: Thanks, Tim, and good afternoon, everyone. Our revenue of $143.8 billion was up 16% year-over-year, our best quarter ever. Across the world, we set all-time revenue records in both developed and emerging markets, and we saw double-digit growth year-over-year across the majority of the markets we track, including the US, Latin America, Western Europe, Greater China, India, and South Asia. Products revenue was $113.7 billion, up 16% year-over-year, driven by double-digit growth in iPhone, setting a new all-time record. As Tim mentioned, thanks to our strong levels of customer loyalty and satisfaction, our installed base of active devices has now surpassed 2.5 billion, reaching another all-time high across all product categories and geographic segments. Services revenue was $30 billion, up 14% year-over-year.
Kevan Parekh: Thanks, Tim, and good afternoon, everyone. Our revenue of $143.8 billion was up 16% year-over-year, our best quarter ever. Across the world, we set all-time revenue records in both developed and emerging markets, and we saw double-digit growth year-over-year across the majority of the markets we track, including the US, Latin America, Western Europe, Greater China, India, and South Asia. Products revenue was $113.7 billion, up 16% year-over-year, driven by double-digit growth in iPhone, setting a new all-time record. As Tim mentioned, thanks to our strong levels of customer loyalty and satisfaction, our installed base of active devices has now surpassed 2.5 billion, reaching another all-time high across all product categories and geographic segments. Services revenue was $30 billion, up 14% year-over-year.
With that, I'll turn it over to Kevin.
Products Revenue was 113.7 billion up 16% year-over-year. Driven by double-digit growth on iPhone setting a new all-time record and as Tim mentioned, thanks to our strong levels of customer. Loyalty and satisfaction are installed base of active devices. Has now surpassed 2.5 billion, reaching another all-time high across all product categories and Geographic segments,
Services Revenue was 30 billion up 14% year-over-year. This performance continues to be broad-based with double digit growth and almost every Market, we track
Thanks, Tim, and good afternoon, everyone. Our revenue of $143.8 billion was up 16% year-over-year—our best quarter ever across the world. We set all-time revenue records in both developed and emerging markets. And we saw double-digit growth year-over-year across a majority of the markets we track, including the US, Latin America, Western Europe, Greater China, India, and South Asia.
We also reached all-time Revenue records for advertising cloud services music and payment services with December quarter, Records On the App Store and video.
Company growth margin was at 48.2% above the high end of our guidance range and up 100 basis points. Sequentially driven by favorable mix and Leverage.
Products revenue was $113.7 billion, up 16% year-over-year, driven by double-digit growth and iPhone setting a new all-time record. And as Tim mentioned, thanks to our strong levels of customer loyalty and satisfaction, our installed base of active devices has now surpassed 2.5 billion, reaching another all-time high across all product categories and geographic segments.
Products gross margin was 40.7% up 450 basis. Point sequentially driven by favorable mix and Leverage.
Kevan Parekh: This performance continues to be broad-based, with double-digit growth in almost every market we track. We also reached all-time revenue records for advertising, cloud services, music, and payment services, with December quarter records on the App Store and video. Company gross margin was at 48.2%, above the high end of our guidance range and up 100 basis points sequentially, driven by favorable mix and leverage. Products' gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage. Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix. Operating expenses landed at $18.4 billion, up 19% year over year. This was within the range we provided and driven by increased investment in R&D.
This performance continues to be broad-based, with double-digit growth in almost every market we track. We also reached all-time revenue records for advertising, cloud services, music, and payment services, with December quarter records on the App Store and video. Company gross margin was at 48.2%, above the high end of our guidance range and up 100 basis points sequentially, driven by favorable mix and leverage. Products' gross margin was 40.7%, up 450 basis points sequentially, driven by favorable mix and leverage. Services gross margin was 76.5%, up 120 basis points sequentially, driven by mix. Operating expenses landed at $18.4 billion, up 19% year over year. This was within the range we provided and driven by increased investment in R&D.
Services Revenue was 30 billion up 14% year-over-year. This performance continues to be broad-based with double digit growth and almost every Market, we track
Services. Gross margin was 76.5% up, 120 basis point sequentially driven by mix.
Operating expenses landed at? 18.4 billion up 19% year-over-year.
We also reached all-time Revenue records for advertising cloud services music and payment services with December quarter, Records On the App Store and video.
We provided and driven by increased investment in R&D.
Company growth margin was at 48.2%, above the high end of our guidance range and up 100 basis points, sequentially driven by favorable mix and leverage.
Products gross margin was 40.7% up 450 basis. Point sequentially driven by favorable mix and Leverage.
Net income was 42.1 billion in diluted earnings per. Share was 2.84 up, 19% year-over-year. Both net income and diluted EPS were all-time records and these. Incredibly strong business results drove an all-time record for operating cash flow coming in at 53.50,
Services gross margin was 76.5%, up 120 basis points, sequentially driven by mix.
Now, I'm going to provide some more details for each of our Revenue categories.
Operating expenses landed at? 18.4 billion up 19% year-over-year.
IPhone Revenue was 85.3 billion up. 23% year-over-year driven by the iPhone 17 family.
Kevan Parekh: Net income was $42.1 billion, and diluted earnings per share was $2.84, up 19% year over year. Both net income and diluted EPS were all-time records, and these incredibly strong business results drove an all-time record for operating cash flow, coming in at $53.9 billion. Now, I'm going to provide some more details for each of our revenue categories. iPhone revenue was $85.3 billion, up 23% year over year, driven by the iPhone 17 family. iPhone saw strength around the world, reaching all-time revenue records in many of the markets we track, including the US, Greater China, Latin America, Western Europe, the Middle East, Australia, and South Asia, as well as a December quarter record in India.
Net income was $42.1 billion, and diluted earnings per share was $2.84, up 19% year over year. Both net income and diluted EPS were all-time records, and these incredibly strong business results drove an all-time record for operating cash flow, coming in at $53.9 billion. Now, I'm going to provide some more details for each of our revenue categories. iPhone revenue was $85.3 billion, up 23% year over year, driven by the iPhone 17 family. iPhone saw strength around the world, reaching all-time revenue records in many of the markets we track, including the US, Greater China, Latin America, Western Europe, the Middle East, Australia, and South Asia, as well as a December quarter record in India.
In the range we provided, and driven by increased investment in R&D.
IPhone saw strength around the world, reaching all-time Revenue records in many of the markets, we track including the US greater China.
Latin America.
Western Europe, the Middle East, Australia and South Asia as well as a December quarter record in India.
Net income was 42.1 billion and diluted earnings per share was $2.84 up. 19% year-over-year. Both net income and diluted EPS were all-time records and these. Incredibly strong business results drove an all-time record for operating cash flow. Coming in at 5 3. 9
Now, I'm going to provide some more details for each of our revenue categories.
The iPhone active install base. Grew to an all-time high and set a new all-time record for upgraders and Aggregate and across many countries including the US.
China, Mainland Japan and India.
iPhone revenue was $85.3 billion, up 23% year-over-year, driven by the iPhone 17 family.
According to a recent survey from World panel, iPhone was a top selling model in the US. Urban China, the UK, Australia, and Japan.
IPhone saw strength around the world, reaching all-time Revenue records in many of the markets, we track including the US greater China.
Latin America.
Customers are loving the latest iPhone lineup, the latest customer satisfaction for the iPhone 17 family in the US was measured at 99% by 4551 research.
Kevan Parekh: The iPhone active install base grew to an all-time high and set a new all-time record for upgraders in aggregate and across many countries, including the US, China Mainland, Japan, and India. According to a recent survey from Worldpanel, iPhone was a top-selling model in the US, Urban China, the UK, Australia, and Japan. Customers are loving the latest iPhone lineup. The latest customer satisfaction for the iPhone 17 family in the US was measured at 99% by 451 Research. Mac revenue was $8.4 billion, down 7% year-over-year. As we described in the last call, we faced a very difficult compare against an M4 MacBook Pro, Mac Mini, and iMac launches in the year-ago quarter. Despite this difficult compare, we continued to see growth in several emerging markets, including Brazil, India, Malaysia, Vietnam, and more.
The iPhone active install base grew to an all-time high and set a new all-time record for upgraders in aggregate and across many countries, including the US, China Mainland, Japan, and India. According to a recent survey from Worldpanel, iPhone was a top-selling model in the US, Urban China, the UK, Australia, and Japan. Customers are loving the latest iPhone lineup. The latest customer satisfaction for the iPhone 17 family in the US was measured at 99% by 451 Research. Mac revenue was $8.4 billion, down 7% year-over-year. As we described in the last call, we faced a very difficult compare against an M4 MacBook Pro, Mac Mini, and iMac launches in the year-ago quarter. Despite this difficult compare, we continued to see growth in several emerging markets, including Brazil, India, Malaysia, Vietnam, and more.
Western Europe, the Middle East, Australia and South Asia as well as a December quarter record in India.
Mac Revenue was 8.4 billion down 7% year-over-year.
The iPhone active install base grew to an all-time high and set a new all-time record for upgraders in aggregate and across many countries, including the US.
As we described in the last call, we faced a very difficult compared against the M4. MacBook Pro Mac Mini and iMac launches in the year ago quarter.
China, Mainland Japan and India.
Despite this difficult compared. We continued to see growth in several Emerging Markets, including Brazil, India, Malaysia, Vietnam, and more.
According to a recent survey from Worldpanel, iPhone was a top-selling model in the US, Urban China, the UK, Australia, and Japan.
And as Tim mentioned earlier, the Mac, install base reached another all-time high with nearly half of the customers who purchased a Mac being new to the product.
Customers are loving the latest iPhone lineup, the latest customer satisfaction for the iPhone 17 family in the US was measured at 99% by 4551 research.
And in the US, customer satisfaction for Mac was measured at 97%.
Mac revenue was $8.4 billion, down 7% year-over-year.
IPad Revenue was 8.6 billion up 6%. Year-over-year driven by the M5 powered, iPad Pro and the a16 powered iPad.
As we described in the last call, we faced a very difficult compare against the M4. MacBook Pro, Mac mini, and iMac launches in the Euro, go quarter.
We continue to add new users to the iPad. In fact, over half, the customers who purchased the iPad during the quarter, were new to the product.
Kevan Parekh: As Tim mentioned earlier, the Mac install base reached another all-time high, with nearly half of the customers who purchased a Mac being new to the product. In the US, customer satisfaction for Mac was measured at 97%. iPad revenue was $8.6 billion, up 6% year-over-year, driven by the M5-powered iPad Pro and the A16-powered iPad. We continued to add new users to the iPad. In fact, over half the customers who purchased an iPad during the quarter were new to the product. This helped the iPad install base to reach an all-time high, and we also reached an all-time high for upgraders. Based on the latest reports from 451 Research, customer satisfaction was 98% in the US. Wearables, home, and accessories revenue was $11.5 billion, down 2% year-over-year.
As Tim mentioned earlier, the Mac install base reached another all-time high, with nearly half of the customers who purchased a Mac being new to the product. In the US, customer satisfaction for Mac was measured at 97%. iPad revenue was $8.6 billion, up 6% year-over-year, driven by the M5-powered iPad Pro and the A16-powered iPad. We continued to add new users to the iPad. In fact, over half the customers who purchased an iPad during the quarter were new to the product. This helped the iPad install base to reach an all-time high, and we also reached an all-time high for upgraders. Based on the latest reports from 451 Research, customer satisfaction was 98% in the US. Wearables, home, and accessories revenue was $11.5 billion, down 2% year-over-year.
Despite this difficult compared. We continued to see growth in several Emerging Markets, including Brazil, India, Malaysia, Vietnam, and more.
This helped the iPad install base to reach an all-time high. And we also reached an all-time high for upgraders
And as Tim mentioned earlier, the Mac install base reached another all-time high, with nearly half of the customers who purchased a Mac being new to the product.
based on the latest reports from 451 research. Customer satisfaction was 98% in the US.
And in the US, customer satisfaction for Mac was measured at 97%.
Wearables home and accessories. Revenue was 11.5 billion down 2% year-over-year.
iPad revenue was $8.6 billion, up 6% year-over-year, driven by the M5-powered iPad Pro and the A16-powered iPad.
During the quarter. We experienced constraints on the airpods Pro 3 and we believe the overall category would have grown had it. Not been for these constraints.
We continue to add new users to the iPad. In fact, over half the customers who purchased in the iPad. During the quarter, were new to the product.
And in the US customer satisfaction was recently reported at 96%.
This helped the iPad install base to reach an all-time high. And we also reached an all-time high for upgraders.
Kevan Parekh: During the quarter, we experienced constraints on the AirPods Pro 3, and we believe the overall category would have grown had it not been for these constraints. The wearables install base reached a new all-time high, with over half of customers purchasing an Apple Watch during the quarter being new to the product. In the US, customer satisfaction was recently reported at 96%. Our services revenue reached an all-time high of $30 billion, up 14% year-over-year. As we said earlier, we had all-time revenue records on advertising, music, payment services, and cloud services, where we saw a double-digit growth on paid subscribers. We continue to be optimistic about the future of our services business. With our install base of over 2.5 billion active devices, we have an incredibly strong foundation for new growth opportunities.
During the quarter, we experienced constraints on the AirPods Pro 3, and we believe the overall category would have grown had it not been for these constraints. The wearables install base reached a new all-time high, with over half of customers purchasing an Apple Watch during the quarter being new to the product. In the US, customer satisfaction was recently reported at 96%. Our services revenue reached an all-time high of $30 billion, up 14% year-over-year. As we said earlier, we had all-time revenue records on advertising, music, payment services, and cloud services, where we saw a double-digit growth on paid subscribers. We continue to be optimistic about the future of our services business. With our install base of over 2.5 billion active devices, we have an incredibly strong foundation for new growth opportunities.
Wearables, Home and Accessories revenue was $11.5 billion, down 2% year-over-year.
Our services Revenue reached, an all-time high of 30 billion up 14% year-over-year. As we said earlier, we had all-time Revenue records on Advertising music payment, services and cloud services where we saw a double-digit growth on paid subscribers.
During the quarter, we experienced constraints on the AirPods Pro 3, and we believe the overall category would have grown had it not been for these constraints.
We continue to be optimistic about the future of our services business, with our install base of over 2 and a half billion active devices. We have an incredibly strong foundation for new growth opportunities.
The wearables installed base reached a new all-time high with over half of customers, purchasing an Apple Watch during the quarter being new to the product.
We saw increased customer engagement across our service offerings with both transacting and paid accounts reaching all-time highs in the quarter.
And in the US, customer satisfaction was recently reported at 96%.
Our service is revenue reached, an all-time high of 30 billion up 14% year-over-year. As we said earlier, we had all-time Revenue records on Advertising music payment, services and cloud services where we saw a double-digit growth on paid subscribers.
And we continue to improve the quality and expand the breadth of our services offerings. From new wallet features like digital ID which provides a way for users to create an ID and wallet using information from their US passport to additional ads, coming to search in the app store, which provides advertisers more ways to drive downloads from search.
Kevan Parekh: We saw increased customer engagement across our service offerings, with both transacting and paid accounts reaching all-time highs in the quarter. We continue to improve the quality and expand the breadth of our services offerings, from new Wallet features like digital ID, which provides a way for users to create an ID in Wallet using information from their US passport, to additional ads coming to search in the App Store, which provides advertisers more ways to drive downloads from search. Turning now to enterprise. Organizations are continuing to expand their fleet of Apple devices to drive productivity while remaining secure. Snowflake has deployed over 9,000 Mac devices company-wide, establishing Mac as a primary laptop across all business units, resulting in increased performance and a reduction in support tickets.
We saw increased customer engagement across our service offerings, with both transacting and paid accounts reaching all-time highs in the quarter. We continue to improve the quality and expand the breadth of our services offerings, from new Wallet features like digital ID, which provides a way for users to create an ID in Wallet using information from their US passport, to additional ads coming to search in the App Store, which provides advertisers more ways to drive downloads from search. Turning now to enterprise. Organizations are continuing to expand their fleet of Apple devices to drive productivity while remaining secure. Snowflake has deployed over 9,000 Mac devices company-wide, establishing Mac as a primary laptop across all business units, resulting in increased performance and a reduction in support tickets.
We continue to be optimistic about the future of our services business, with our install base of over 2 and a half billion active devices. We have an incredibly strong foundation for new growth opportunities.
We saw increased customer engagement across our service offerings, with both transacting and paid accounts reaching all-time highs in the quarter.
Turning now to Enterprise organizations are continuing to expand their Fleet of Apple devices to drive productivity. While remaining secure snowflake has deployed over 9,000 Mac devices. Companywide establishing Mac as a primary laptop across all business units, resulting in increased performance and a reduction in support tickets.
Astrozen is rolling out over 5,000. M5 powered, iPad Pros to its pharmaceutical sales team. To take advantage of AI capabilities, including Apple intelligence. While meeting with clinicians daily.
And we continue to improve the quality and expand the breadth of our services offerings. From new wallet features like digital ID which provides a way for users to create an ID and wallet using information from their US passport to additional ads, coming to search in the app store, which provides advertisers more ways to drive downloads from search.
And in Mexico, copel the country's largest domestic retailer. Recently, added MacBook Air in addition to a growing Fleet of over 10,000 iPad devices.
Let's turn to our cash position and capital return program.
We ended the quarter with 145 billion dollars in cash and marketable, securities.
Kevan Parekh: AstraZeneca is rolling out over 5,000 M5-powered iPad Pros to its pharmaceutical sales team to take advantage of AI capabilities, including Apple Intelligence, while meeting with clinicians daily. And in Mexico, Coppel, the country's largest domestic retailer, recently added MacBook Air in addition to a growing fleet of over 10,000 iPad devices. Let's turn to our cash position and capital return program. We ended the quarter with $145 billion in cash and marketable securities. We had $2.2 billion of debt maturities and decreased commercial paper by $6 billion, resulting in $91 billion in total debt. Therefore, at the end of the quarter, net cash was $54 billion. During the quarter, we returned nearly $32 billion to shareholders.
AstraZeneca is rolling out over 5,000 M5-powered iPad Pros to its pharmaceutical sales team to take advantage of AI capabilities, including Apple Intelligence, while meeting with clinicians daily. And in Mexico, Coppel, the country's largest domestic retailer, recently added MacBook Air in addition to a growing fleet of over 10,000 iPad devices. Let's turn to our cash position and capital return program. We ended the quarter with $145 billion in cash and marketable securities. We had $2.2 billion of debt maturities and decreased commercial paper by $6 billion, resulting in $91 billion in total debt. Therefore, at the end of the quarter, net cash was $54 billion. During the quarter, we returned nearly $32 billion to shareholders.
Turning now to Enterprise organizations are continuing to expand their Fleet of Apple devices to drive productivity. While remaining secure snowflake has deployed over 9,000 Mac devices, companywide establishing Mac as the primary laptop across all business units, resulting in increased performance and a reduction in support tickets.
We had 2.2 billion dollars of debt maturities, and decreased commercial paper by 6 billion dollars resulting in 91 billion dollars in total debt.
Therefore, at the end of the quarter, net cash was 54 billion.
Astrozen is rolling out over 5,000 M5-powered iPad Pros to its pharmaceutical sales team, to take advantage of AI capabilities, including Apple Intelligence, while meeting with clinicians daily.
And in Mexico, Coppel, the country's largest domestic retailer, recently added MacBook Air, in addition to a growing fleet of over 10,000 iPad devices.
During the quarter, we returned nearly 32 billion dollars to shareholders. This included 3.9 billion in dividends and equivalents and 25 billion dollars through open market. Repurchases of 93 million, Apple shares,
Let's turn to our cash position and capital return program.
We ended the quarter with $145 billion in cash and marketable securities.
as we move ahead into the March quarter, I'd like to review our Outlook which includes the types of forward-looking information that you hosting you referred to
We had 2.2 billion dollars of debt maturities, and decreased commercial paper by 6 billion dollars resulting in 91 billion dollars in total debt.
Importantly, the color we're providing assumes that Global tariff rates policies and their application remain in effect as of this call and the global macroeconomic Outlook does not worsen from today.
Therefore, at the end of the quarter, net cash was 54 billion.
Kevan Parekh: This included $3.9 billion in dividends and equivalents and $25 billion through open market repurchases of 93 million Apple shares. As we move ahead into the March quarter, I'd like to review our outlook, which includes the types of forward-looking information that Suhasini referred to. Importantly, the color we're providing assumes that global tariff rates, policies, and their application remain in effect as of this call, and the global macroeconomic outlook does not worsen from today. We expect our March quarter total company revenue to grow by 13% to 16% year-over-year, which comprehends our best estimates of constrained iPhone supply during the quarter. We expect services revenue to grow at a year-over-year rate similar to what we reported in the December quarter. We expect gross margin to be between 48% and 49%.
This included $3.9 billion in dividends and equivalents and $25 billion through open market repurchases of 93 million Apple shares. As we move ahead into the March quarter, I'd like to review our outlook, which includes the types of forward-looking information that Suhasini referred to. Importantly, the color we're providing assumes that global tariff rates, policies, and their application remain in effect as of this call, and the global macroeconomic outlook does not worsen from today. We expect our March quarter total company revenue to grow by 13% to 16% year-over-year, which comprehends our best estimates of constrained iPhone supply during the quarter. We expect services revenue to grow at a year-over-year rate similar to what we reported in the December quarter. We expect gross margin to be between 48% and 49%.
We expect our March quarter total company Revenue to grow by 13 to 16% year-over-year, which comprehends our best estimates of constrained iPhone supply during the quarter.
During the quarter, we returned nearly $32 billion to shareholders. This included $3.9 billion in dividends and equivalents and $25 billion through open market repurchases of 93 million Apple shares.
We expect Services Revenue to grow at a year-over-year rate, similar to what we reported in the December quarter,
As we move ahead into the March quarter, I'd like to review our outlook, which includes the types of forward-looking information that you, hosting, referred to.
we expect gross margin to be between 48% and 49%.
We expect operating expenses to be between 18.4 billion and 18.7 billion dollars.
Importantly, the color we're providing assumes that global tariff rates, policies, and their application remain in effect as of this call, and the global macroeconomic outlook does not worsen from today.
Which is at a similar level to what we reported in the, December quarter, and driven by higher R&D on a year-over-year basis.
We expect our March quarter total company revenue to grow by 13 to 16% year-over-year, which comprehends our best estimates of constrained iPhone supply during the quarter.
We expect oi and E to be around a hundred million dollars excluding any potential impact from the mark-to-market of minority Investments and our tax rate to be around 17.5%.
We expect Services Revenue to grow at a year-over-year rate, similar to what we reported in the December quarter,
Kevan Parekh: We expect operating expenses to be between $18.4 billion and 18.7 billion dollars, which is at a similar level to what we reported in the December quarter and driven by higher R&D on a year-over-year basis. We expect OI&E to be around $100 million dollars, excluding any potential impact from the mark-to-market of minority investments, and our tax rate to be around 17.5%. Finally, today, our board of directors has declared a cash dividend of $0.26 per share of common stock, payable on 12 February 2026, to shareholders of record as of 9 February 2026. With that, let's open the call to questions.
We expect operating expenses to be between $18.4 billion and 18.7 billion dollars, which is at a similar level to what we reported in the December quarter and driven by higher R&D on a year-over-year basis. We expect OI&E to be around $100 million dollars, excluding any potential impact from the mark-to-market of minority investments, and our tax rate to be around 17.5%. Finally, today, our board of directors has declared a cash dividend of $0.26 per share of common stock, payable on 12 February 2026, to shareholders of record as of 9 February 2026. With that, let's open the call to questions.
We expect gross margin to be between 48% and 49%.
finally today, our board of directors has declared a cash dividend of 26 cents per share of common stock payable on February 12th, 2026 to shareholders of record as of February 9th 2026
We expect operating expenses to be between $18.4 billion and $18.7 billion.
With that, let's open the call the questions.
Which is at a similar level to what we reported in the December quarter, and driven by higher R&D on a year-over-year basis.
Thank you. Kevin. We ask that you limit yourself to 2 questions. Operator, may we have the first question, please.
Certainly.
We'll go ahead and take our first question from I meet diani of ever core.
We expect OI and E to be around $100 million, excluding any potential impact from the mark-to-market of minority investments, and our tax rate to be around 17.5%.
Finally today, our board of directors has declared a cash dividend of 26 cents per share of common stock payable on February 12th, 2026.
to shareholders of record as of February 9th, 2026
Yes, I have 2 maybe to start with, um, you know, there's a lot of focus on the impact of memory to, to host a companies. And I'd love to kind of get you all perspective. When you fully guide and gross margins up into the March quarter, just talked about, you know, a your comfort and securing the bits that you need for shipments and B. How do we think about memory inflation, uh, flowing through Apple's model over time.
Suhasini Chandramouli: Thank you, Kevan. We ask that you limit yourself to two questions. Operator, may we have the first question, please?
Suhasini Chandramouli: Thank you, Kevan. We ask that you limit yourself to two questions. Operator, may we have the first question, please?
With that, let's open the call to questions.
Operator: Certainly. We'll go ahead and take our first question from Amit Daryanani of Evercore.
Operator: Certainly. We'll go ahead and take our first question from Amit Daryanani of Evercore.
Yeah, mid. Hi. It's Tim. Uh, let me back up a bit and talk about the constraints that Kevin referred to.
Thank you, Kevin. We ask that you limit yourself to two questions. Operator, may we have the first question, please.
Certainly.
In his remarks and memory.
We'll go ahead and take our first question from Amit Deyani of Evercore.
Amit Daryanani: Yes, I have two. Maybe to start with, you know, there's a lot of focus on the impact of memory to, to a host of companies, and I'd love to kind of get your perspective when you focus the guiding gross margins up, into the March quarter. Just talk about, you know, A, your comfort in securing the bits that you need for shipments, and B, how do we think about memory inflation, flowing through Apple's model over time?
Amit Daryanani: Yes, I have two. Maybe to start with, you know, there's a lot of focus on the impact of memory to, to a host of companies, and I'd love to kind of get your perspective when you focus the guiding gross margins up, into the March quarter. Just talk about, you know, A, your comfort in securing the bits that you need for shipments, and B, how do we think about memory inflation, flowing through Apple's model over time?
With a customer response on the latest iPhone lineup. It, I exceeded our expectations uh to say the least and you know iPhone grew 23%
Tim Cook: ... Yeah, Amit, hi, it's Tim. Let me back up a bit and talk about the constraints that Kevin referred to in his remarks and memory, and try to get both of these out at once. First of all, we were thrilled with the customer response on the latest iPhone lineup. It exceeded our expectations, to say the least, and, you know, iPhone grew 23%. What the result of that was, was that we exited the December quarter with very lean channel inventory due to that staggering level of demand. And based on that, we're in a supply chase mode to meet the very high levels of customer demand. We are currently constrained, and at this point, it's difficult to predict when supply and demand will balance.
Tim Cook: ... Yeah, Amit, hi, it's Tim. Let me back up a bit and talk about the constraints that Kevin referred to in his remarks and memory, and try to get both of these out at once. First of all, we were thrilled with the customer response on the latest iPhone lineup. It exceeded our expectations, to say the least, and, you know, iPhone grew 23%. What the result of that was, was that we exited the December quarter with very lean channel inventory due to that staggering level of demand. And based on that, we're in a supply chase mode to meet the very high levels of customer demand. We are currently constrained, and at this point, it's difficult to predict when supply and demand will balance.
what the result of that was uh was that we exited the December quarter with very lean Channel, inventory due to that staggering level of demand,
Up into the March quarter, just talked about, you know, a your comfort and securing the bits that you need for shipments and B. How do we think about memory inflation? Uh, flowing through Apple's model over time.
And based on that, we're in a a supply chain mode to meet the very high levels of customer demand.
Yeah, hi. It's Tim. Uh, let me back up a bit and talk about the constraints that Kevin referred to.
We're currently constrained.
In his remarks and memory.
And at this point, it's difficult to predict when supply and demand will balance.
Uh, the constraints that we have are driven by the availability of the advanced nodes that our socs are produced on.
and,
Try to get both of these out at once. Uh, first of all, we were thrilled with the customer response on the latest iPhone lineup. It exceeded our expectations, uh, to say the least, and, you know, iPhones grew 23%.
at this time, we're seeing less flexibility in supply chain than normal, uh, partly because of our increase, uh, demand that I just spoke about
What the result of that was, uh, was that we exited the December quarter with very lean channel inventory, due to that staggering level of demand.
from a memory point of view to answer your question.
And based on that, we're in a supply chain mode to meet the very high levels of customer demand.
Memory had a minimal impact on the q1. So the December quarter, gross margin.
We're currently constrained.
Tim Cook: The constraints that we have are driven by the availability of the advanced nodes that our SoCs are produced on. At this time, we're seeing less flexibility in supply chain than normal, partly because of our increased demand that I just spoke about. From a memory point of view, to answer your question, memory had a minimal impact on the Q1, so the December quarter gross margin. We do expect it to be a bit more of an impact to the Q2 gross margin, and that was comprehended in the outlook of 48% to 49% that Kevan gave earlier. Beyond Q2, you know, we don't obviously provide outlooks beyond the current quarter, but we do continue to see market pricing for memory increasing significantly. As always, we'll look at a range of options to deal with that.
The constraints that we have are driven by the availability of the advanced nodes that our SoCs are produced on. At this time, we're seeing less flexibility in supply chain than normal, partly because of our increased demand that I just spoke about. From a memory point of view, to answer your question, memory had a minimal impact on the Q1, so the December quarter gross margin. We do expect it to be a bit more of an impact to the Q2 gross margin, and that was comprehended in the outlook of 48% to 49% that Kevan gave earlier. Beyond Q2, you know, we don't obviously provide outlooks beyond the current quarter, but we do continue to see market pricing for memory increasing significantly. As always, we'll look at a range of options to deal with that.
And at this point, it's difficult to predict when supply and demand will balance.
We do expect it to be a bit more of an impact to the Q2 gross margin and that was comprehended in the Outlook uh of 48 to 49% that Kevin gave uh, earlier.
Uh the constraints that we have are driven by the availability of the advanced nodes that our soc's are produced on.
and,
Beyond Q2, uh, you know, we don't obviously provide outlooks beyond the current quarter um, but
At this time, we're seeing less flexibility in supply chain than normal, partly because of our increased demand that I just spoke about.
We do continue to see market pricing for memory, increasing significantly.
from a memory point of view to answer your question.
Uh, as always, we'll look at a range of options to, to deal with that.
So hopefully that gives you the full
Memory had a minimal impact on the q1. So the December quarter, gross margin.
Full View.
We do expect it to be a bit more of an impact to the Q2 gross margin, and that was comprehended in the outlook.
Uh of 48 to 49% that Kevin gave uh earlier.
Beyond Q2.
Uh, you know, we don't, obviously, provide outlooks beyond the current quarter, uh, but
We do continue to see market pricing for memory increasing significantly.
Tim Cook: So hopefully that gives you the full, full view.
So hopefully that gives you the full, full view.
Uh, as always, we'll look at a range of options to, to deal with that.
So, hopefully that gives you the full
full View.
Amit Daryanani: Yep. No, thank you, and I appreciate all the clarity on that, Tim. You know, maybe the other second question I have for you is, you know, maybe just touch on the China strength you folks had. I think this is very close to all-time high revenues you've had in China. What's driving the strength over here? And just sort of the durability of the growth rates we saw in the December quarter would be helpful to understand. Thank you.
Amit Daryanani: Yep. No, thank you, and I appreciate all the clarity on that, Tim. You know, maybe the other second question I have for you is, you know, maybe just touch on the China strength you folks had. I think this is very close to all-time high revenues you've had in China. What's driving the strength over here? And just sort of the durability of the growth rates we saw in the December quarter would be helpful to understand. Thank you.
No, thank you. I appreciate all the clarity on that Tim. Um, you know, maybe the other second question I have for you is, you know, maybe just touch on the China strength. You folks had um, I think this is very close to all-time high revenues. We've had in China, uh, what's driving, the strength over here and just sort of the durability of the growth rate. We sign uh, in the December quarter, it would be helpful to understand, thank you. Sure. Uh, greater China was up 38% year on year. Uh, it was driven by iPhone where we set an all-time Revenue record, uh, so is the it was the best iPhone quarter in history, in in Greater China. It's driven by the customer, enthusiasm for the iPhone 17 lineup. And I would tell you that during the quarter,
Tim Cook: Sure. Greater China was up 38% year-over-year. It was driven by iPhone, where we set an all-time revenue record. So it's the-- it was the best iPhone quarter in history in Greater China. It's driven by the customer enthusiasm for the iPhone 17 lineup. And I would tell you that during the quarter, traffic in our stores in China grew by strong double digits year-over-year. It was a terrific quarter. Our installed base reached an all-time high in both Greater China and Mainland China, and we set an all-time record for the upgraders, and we saw strong double-digit growth on switchers. And according to a survey from Worldpanel, iPhones were the top three smartphones in urban China during the quarter.
Tim Cook: Sure. Greater China was up 38% year-over-year. It was driven by iPhone, where we set an all-time revenue record. So it's the-- it was the best iPhone quarter in history in Greater China. It's driven by the customer enthusiasm for the iPhone 17 lineup. And I would tell you that during the quarter, traffic in our stores in China grew by strong double digits year-over-year. It was a terrific quarter. Our installed base reached an all-time high in both Greater China and Mainland China, and we set an all-time record for the upgraders, and we saw strong double-digit growth on switchers. And according to a survey from Worldpanel, iPhones were the top three smartphones in urban China during the quarter.
Traffic in our stores, in China, grew by strong double-digit year-over-year. Was uh, it was a terrific quarter uh our installed base reached an all-time high in both greater China and and Mainland China.
No, thank you. I appreciate all the clarity on that, Tim. Um, you know, maybe the other second question I have for you is, you know, maybe just touch on the China strength. You folks had, um, I think this is very close to all-time high revenues we've had in China. Uh, what's driving the strength over here and just sort of the durability of the growth rate we saw, uh, in the December quarter. It would be helpful to understand, thank you. Sure. Uh, Greater China was up 30.
And we set an all-time record for the, um, upgraders. And we saw strong double-digit growth on switchers
8% year-on-year. Uh, it was driven by iPhone, where we set an all-time revenue record, uh, so it was the, it was the best iPhone quarter in history in Greater China. It's driven by the customer enthusiasm for the iPhone 17 lineup.
And I would tell you that during the quarter,
Traffic in our stores, in China, grew by strong double-digit year-over-year. Was, uh, it was a terrific quarter. Uh, our install base reached an all-time high in both Greater China and, and Mainland China.
And we set an all-time record for the, um, upgraders. And we saw strong double-digit growth on switchers.
and uh,
And uh, according to a survey from World panel, iPhones were the top 3 smartphones in urban China during the quarter. So it was and it's really driven, uh, primarily by the product strength and the customer response to the product strength. Um, we do see on non iPhone products uh, that the majority of customers that are buying a a Mac and iPad, a watch are still new to that product. So that's a very good sign for us. And if you look at iPad on that same survey, iPad was the top uh, tablet model in urban China. And according to Counterpoint
Tim Cook: So it was and it's really driven primarily by the product strength and the customer response to the product strength. We do see on non-iPhone products that the majority of customers that are buying a Mac, an iPad, a Watch, are still new to that product, so that's a very good sign for us. And if you look at iPad, on that same survey, iPad was the top tablet model in Urban China. And according to Counterpoint, the MacBook Air was the top-selling laptop model, and Mac Mini was the top-selling desktop model in the December quarter. So overall, great quarter in China. We could not be more happy with it.
So it was and it's really driven primarily by the product strength and the customer response to the product strength. We do see on non-iPhone products that the majority of customers that are buying a Mac, an iPad, a Watch, are still new to that product, so that's a very good sign for us. And if you look at iPad, on that same survey, iPad was the top tablet model in Urban China. And according to Counterpoint, the MacBook Air was the top-selling laptop model, and Mac Mini was the top-selling desktop model in the December quarter. So overall, great quarter in China. We could not be more happy with it.
The MacBook Air was the top selling laptop model and Mac. Mini was the top selling desktop model in the December quarter.
So overall, great quarter in China, we could not be uh more happy with it.
according to a survey from World panel, iPhones were the top 3 smartphones in urban China during the quarter. So it was and it's really driven, uh, primarily by the product strength and the customer response to the product strike. Um,
Awesome. Thank you, Ahmed operator. Can we get the next question, please?
Our next question is from Eric Woodring of Morgan Stanley. Please go ahead.
We do see on non-iPhone products, uh, that the majority of customers that are buying a Mac, an iPad, a Watch, are still new to that product. So that's a very good sign for us. And if you look at iPad, on that same survey, iPad was the top, uh, tablet model in urban China. And according to Counterpoint...
the MacBook Air was the top selling laptop model and Mac. Mini was the top selling desktop model in the December quarter.
So overall, great quarter in China, we could not be uh more happy with it.
[Company Representative] (Apple): Awesome. Thank you, Amit. Operator, could we get the next question, please?
Suhasini Chandramouli: Awesome. Thank you, Amit. Operator, could we get the next question, please?
Operator: Our next question is from Eric Woodring of Morgan Stanley. Please go ahead.
Operator: Our next question is from Eric Woodring of Morgan Stanley. Please go ahead.
Operator, can we get the next question, please?
Erik Woodring: Great, guys. Thank you for taking my questions. Tim, congrats on announcing the partnership with Google, and we're all excited to see what you bring to market later this year. When I think about your AI initiatives, you know, it's clear there are added costs associated with that. We're obviously seeing that flow through in OpEx. You know, can you help us understand maybe what the revenue upside potential that exists with AI? I, you know, many of your competitors have already integrated AI into their devices, and it's just not clear yet what incremental monetization they're seeing because of AI, but you're always disciplined with investing. You obviously have a differentiated product. So how do you monetize AI, and what's the timeline to realizing that ROI? Then a quick follow-up. Thank you.
Erik Woodring: Great, guys. Thank you for taking my questions. Tim, congrats on announcing the partnership with Google, and we're all excited to see what you bring to market later this year. When I think about your AI initiatives, you know, it's clear there are added costs associated with that. We're obviously seeing that flow through in OpEx. You know, can you help us understand maybe what the revenue upside potential that exists with AI? I, you know, many of your competitors have already integrated AI into their devices, and it's just not clear yet what incremental monetization they're seeing because of AI, but you're always disciplined with investing. You obviously have a differentiated product. So how do you monetize AI, and what's the timeline to realizing that ROI? Then a quick follow-up. Thank you.
Our next question is from Eric Woodring of Morgan Stanley. Please go ahead.
Incremental monetization. They're seeing because of AI but you're always disciplined with investing. You obviously have a differentiated product. So how do you monetize Ai and what's the timeline to realizing that Roi then a quick follow-up? Thank you. Well, let me just say that we're bringing uh, intelligence to more of what people love and we're integrating it across the operating system, in a, in a, a personal and private way. And I think that by doing, so, it creates Great Value and that opens up a range of opportunities across our products and services
And and we are super helpful. And we're, we're we're very happy with the collaboration with Google as well. I said,
Tim Cook: Well, let me just say that we're bringing intelligence to more of what people love, and we're integrating it across the operating system in a personal and private way. And I think that by doing so, it creates great value, and that opens up a range of opportunities across our products and services. And we are-
Tim Cook: Well, let me just say that we're bringing intelligence to more of what people love, and we're integrating it across the operating system in a personal and private way. And I think that by doing so, it creates great value, and that opens up a range of opportunities across our products and services. And we are-
Okay, thank you Tim. And then maybe just a follow-up now. Uh, now that you have kind of more time and and dated, to evaluate this cycle, can you maybe help us understand what the primary factors are driving strength in the iPhone? I'm sure there's a number of factors, but if you, if you had to point to 1 or 2, just what would they be and how sustainable do you think those are?
But for taking my questions, um, Tim, congrats on announcing the partnership with Google and we're all excited to see what you bring to Market later this year. Um, what, what I think about your AI initiatives, you know, it's clear there are added costs associated with that. We're obviously seeing that flow through an Opex, you know, can you help us understand maybe what the revenue upside potential that exists with AI? Um I I you know many of your competitors have already integrated AI into their devices and it's it's just not clear yet. What incremental monetization? They're seeing because of AI but you're always disciplined with investing. You obviously have a differentiated product so how do you monetize Ai and what's the timeline to realizing that Roi then a quick follow-up? Thank you. Well, let me just say that we're bringing uh, intelligence to more of what people love and we're integrating it across the operating system, in a, in a, a personal, and private way. And I think that by doing so, it creates great value.
And that opens up a range of opportunities across our products and services.
Erik Woodring: Okay, super helpful.
Erik Woodring: Okay, super helpful.
Tim Cook: We're very happy with the collaboration with Google as well, I should add.
Tim Cook: We're very happy with the collaboration with Google as well, I should add.
I think it's different for different cohorts, uh, of of where people are coming from in the the, the device that they have, but it's a combination of things. Always that make the products sing. It's
And we are okay, super helpful. And we're very happy with the collaboration with Google as well, I said.
Ben Reitzes: ... Okay. Thank you, Tim. And then maybe just a follow-up. Now, now that you have kind of more time and, and data to evaluate this cycle, can you maybe help us understand what the primary factors are driving strength in the iPhone? I, I'm sure there's a number of factors, but if you, if you had to point to one or two, just what would they be, and how sustainable do you think those are?
Erik Woodring: ... Okay. Thank you, Tim. And then maybe just a follow-up. Now, now that you have kind of more time and, and data to evaluate this cycle, can you maybe help us understand what the primary factors are driving strength in the iPhone? I, I'm sure there's a number of factors, but if you, if you had to point to one or two, just what would they be, and how sustainable do you think those are?
Tim Cook: I think it's different for different cohorts of where people are coming from in the device that they have. But it's a combination of things always that make the product sing. It's the display, it's the camera, it's the performance, it's the new selfie camera, it's the design. The design is beloved. And so it's all of these things that come together at once and are producing a very strong product cycle, as witnessed by our December quarter results.
Tim Cook: I think it's different for different cohorts of where people are coming from in the device that they have. But it's a combination of things always that make the product sing. It's the display, it's the camera, it's the performance, it's the new selfie camera, it's the design. The design is beloved. And so it's all of these things that come together at once and are producing a very strong product cycle, as witnessed by our December quarter results.
Okay, thank you, Tim. And then maybe just a follow-up now. Uh, now that you have kind of more time and data to evaluate this cycle, can you maybe help us understand what the primary factors are driving strength in the iPhone? I'm sure there's a number of factors, but if you had to point to one or two, just what would they be and how sustainable do you think those are?
It's the display. It's the camera. It's the performance. Uh, it's the new, uh, selfie camera. Uh, it's the design. The design is beloved and so it's it's all of these things that, that, um, that come together at once and and have are producing a very strong product cycle is witnessed by our December quarter results.
Great. Thank you. Tim best of luck. Yeah, thank you, awesome. Thank you Eric. Operator, could we get the next question, please?
I think it's different for different cohorts, uh, of where people are coming from in the, the device that they have, but it's a combination of things always that make the products sing. It's
Well, now go to Michael and of Goldman Sachs. Please go ahead.
It's the display. It's the camera. It's the performance. Uh, it's the new, uh, selfie camera. Uh, it's the design. The design is beloved, and so it's, it's all of these things that, that, um, that come together at once and, and have our producing a very strong product cycle, as witnessed by our December quarter results.
Ben Reitzes: Great. Thank you, Tim. Best of luck.
Erik Woodring: Great. Thank you, Tim. Best of luck.
Tim Cook: Yeah, thank you.
Tim Cook: Yeah, thank you.
[Company Representative] (Apple): Awesome. Thank you, Eric. Operator, could we get the next question, please?
Suhasini Chandramouli: Awesome. Thank you, Eric. Operator, could we get the next question, please?
Great. Thank you. Tim, best of luck. Yeah, thank you.
Uh, wonderful, uh, good afternoon, thank you for the questions. I have 2 as well, if I could, um, first, you know, it was encouraging to hear about the revenue growth Outlook of 13 to 16% for the March quarter. Um, I was just wondering if you could, you know, talk about um, any, any comps that we should be particularly aware of as we kind of think about. Um, each of the product categories, I know, last year you guys had, you know, MacBook Air with M4, um, the iPhone 16 e, um, the iPad with a 16 and the iPad Air with M3. So,
Thank you, Eric operator, could we get the next question, please?
Operator: We'll now go to Michael Ng of Goldman Sachs. Please go ahead.
Operator: We'll now go to Michael Ng of Goldman Sachs. Please go ahead.
Michael Ng: Wonderful. Good afternoon, thank you for the questions. I have two as well, if I could. First, you know, it was encouraging to hear about the revenue growth outlook of 13% to 16% for the March quarter. I was just wondering if you could, you know, talk about any comps that we should be particularly aware of as we kind of think about each of the product categories. I know last year you guys had, you know, MacBook Air with M4, the iPhone 16e, the iPad A16, and the iPad Air with M3. So just wanted to, you know, ask if those things would create tough comps, or is it just less of an issue, just given the new product outlook? Thank you.
Michael Ng: Wonderful. Good afternoon, thank you for the questions. I have two as well, if I could. First, you know, it was encouraging to hear about the revenue growth outlook of 13% to 16% for the March quarter. I was just wondering if you could, you know, talk about any comps that we should be particularly aware of as we kind of think about each of the product categories. I know last year you guys had, you know, MacBook Air with M4, the iPhone 16e, the iPad A16, and the iPad Air with M3. So just wanted to, you know, ask if those things would create tough comps, or is it just less of an issue, just given the new product outlook? Thank you.
Well, now go to Michael of Goldman Sachs. Please go ahead.
So just wanted to, you know, ask if those things would create tough comps or um is it just less of an issue? Just given the the new product Outlook. Thank you.
Yeah. Mike. It's Kevin. How are you? Um, thanks for the question. Yeah, I wouldn't say there's any particular um, comp issue that we note is, is you recall last quarter, we talked about the difficult comparison, we had a Mac, um, but there's nothing that rises to that kind of, um, color that we'd outline, you know, in, in the Outlook. And so, I think it's just, you know, continuation of this wrong cycle. We're seeing subject to constraints that I had mentioned, in the prepared remarks that Tim, you know, alluded to a little earlier as well.
Kevan Parekh: Yeah, Mike, it's Kevin. How are you? Thanks for the question. Yeah, I wouldn't say there's any particular comp issue that we'd note. As you recall, last quarter, we talked about the difficult comparison we had on Mac, but there's nothing that rises to that kind of color that we'd outline, you know, in the outlook. And so I think it's just, you know, continuation of the strong cycle we're seeing, subject to the constraints that I had mentioned in the prepared remarks that Tim, you know, alluded to a little earlier as well.
Kevan Parekh: Yeah, Mike, it's Kevin. How are you? Thanks for the question. Yeah, I wouldn't say there's any particular comp issue that we'd note. As you recall, last quarter, we talked about the difficult comparison we had on Mac, but there's nothing that rises to that kind of color that we'd outline, you know, in the outlook. And so I think it's just, you know, continuation of the strong cycle we're seeing, subject to the constraints that I had mentioned in the prepared remarks that Tim, you know, alluded to a little earlier as well.
Uh, wonderful, uh, good afternoon, thank you for the questions. I have 2 as well, if I could, um, first, you know, it was encouraging to hear about the revenue growth Outlook of 13 to 16% for the March quarter. Um, I was just wondering if you could, you know, talk about um, any, any comps that we should be particularly aware of as we kind of think about. Um, each of the product categories, I know, last year you guys had, you know, MacBook Air with M4, um, the iPhone 16 e, um the iPad A6 and the iPad Air with M3. So just wanted to, you know, ask if those things would create tough comps or um is it just less of an issue? Just given the the new product Outlook. Thank you.
Great, uh, wonderful. Um, and then, you know, just on on Services, um, you know, advertising, you know, uh, strong in the quarter. Um, I wanted to ask about some of the, uh, you know, new growth opportunities and, and that and and advertising. Um, I know you guys are doing the new ad slots in the App Store. Um, maybe you could just talk a little bit about, uh, that. And then any plans to do more, um, in advertising across other products like Maps or or TV, thank you.
Michael Ng: Great. Wonderful. And then, you know, just on services, you know, advertising, you know, strong in the quarter. I wanted to ask about some of the, you know, new growth opportunities in advertising. I know you guys are doing the new ad slots in the App Store. Maybe you could just talk a little bit about that, and then any plans to do more in advertising across other products like Maps or TV? Thank you.
Michael Ng: Great. Wonderful. And then, you know, just on services, you know, advertising, you know, strong in the quarter. I wanted to ask about some of the, you know, new growth opportunities in advertising. I know you guys are doing the new ad slots in the App Store. Maybe you could just talk a little bit about that, and then any plans to do more in advertising across other products like Maps or TV? Thank you.
Yeah. Mike. It's Kevin. How are you? Um, thanks for the question. Yeah, I wouldn't say there's any particular, um, comp issue that we note. As you recall, last quarter we talked about the difficult comparison we had in Mac, um, but there's nothing that rises to that kind of, um, color that we'd outline, you know, in the outlook. And so, I think it's just, you know, continuation of this run cycle we're seeing, subject to constraints that I had mentioned in the prepared remarks, that Tim, you know, alluded to a little earlier as well.
Yeah sure. Um like what I was saying, just if I said back in general, I think as we outlined we saw a really good broad-based um performance in our Crosser Services business. So ranging, from you know, all time records and advertising music payment services and cloud services. So I think we see really good opportunities across a lot of our service categories. And we continue to, you know, add new service offerings, we talked about, you know what we added to the um to the wallet, like a digital ID and you reference
Kevan Parekh: Yeah, sure. Michael, I would say, just as I said back in general, I think as we outlined, we saw really good broad-based performance in our cross-service business, so ranging from, you know, all-time records in advertising, music, payment services, and cloud services. So I think we see really good opportunities across a lot of our service categories, and we continue to, you know, add new service offerings. We talked about, you know, what we added to the Wallet, like digital ID, and then you referenced the additional, kind of, additional ads coming into search in the App Store, which we are excited about. It provides, you know, advertisers more ways to be discovered. And so I think we'll continue to look for ways to expand opportunities to add value to users and also, you know, create opportunities for Apple.
Kevan Parekh: Yeah, sure. Michael, I would say, just as I said back in general, I think as we outlined, we saw really good broad-based performance in our cross-service business, so ranging from, you know, all-time records in advertising, music, payment services, and cloud services. So I think we see really good opportunities across a lot of our service categories, and we continue to, you know, add new service offerings. We talked about, you know, what we added to the Wallet, like digital ID, and then you referenced the additional, kind of, additional ads coming into search in the App Store, which we are excited about. It provides, you know, advertisers more ways to be discovered. And so I think we'll continue to look for ways to expand opportunities to add value to users and also, you know, create opportunities for Apple.
Great, uh, wonderful. Um, and then, you know, just on Services, um, you know, advertising, you know, uh, strong in the quarter. Um, I wanted to ask about some of the, uh, you know, new growth opportunities and, and, and advertising. Um, I know you guys are doing the new ad slots in the App Store. Um, maybe you could just talk a little bit about, uh, that. And then any plans to do more, um, in advertising across other products like Maps or, or TV, thank you.
The additional. Um, I kind of additional ads coming into the search and the app store which we are excited about it provides, you know, advertisers more ways to be discovered. And so I think we'll continue to look for ways to expand, um, opportunities, to add value to users, and also, um, you know, create opportunities for Apple. I think, as we talked about, um, we created, you know, across a really significant Milestone at 2 and a half billion, you know, active devices. So we really feel excited about the opportunity that provides for our services business as well.
Wonderful, thanks for the thoughts. Kevin
I'm sure, thanks. Thank, thank you, Mike. Operator, could we get the next question, please?
The next question will be coming from.
Ben reesus of Melius. Please go ahead.
Yeah. Hey guys, how are you?
Hi Ben.
Kevan Parekh: I think, as we talked about, we created, you know, crossed a really significant milestone at 2.5 billion, you know, active devices. So we really feel excited about the opportunity that provides for our services business as well.
I think, as we talked about, we created, you know, crossed a really significant milestone at 2.5 billion, you know, active devices. So we really feel excited about the opportunity that provides for our services business as well.
I think as we talked about um, we created, you know, we crossed a really significant Milestone at 2 and a half billion, you know, active devices. So we really feel excited about the opportunity that provides for our services business as well.
Michael Ng: Wonderful. Thanks for the thoughts, Kevin.
Michael Ng: Wonderful. Thanks for the thoughts, Kevin.
Kevan Parekh: Sure thing.
Kevan Parekh: Sure thing.
[Company Representative] (Apple): Thank you, Mike. Operator, could we get the next question, please?
Suhasini Chandramouli: Thank you, Mike. Operator, could we get the next question, please?
Wonderful, thanks for the thoughts, Kevin.
Hey Tim. Uh, first question is on Google partnership again. Uh, I wanted to understand how you came to that decision with regard to the AI and Siri in particular and if there's an opportunity for you guys to share in Revenue too with that partnership like you do in search.
Sure thing. Thank you, Mike. Operator, could we get the next question, please?
Operator: The next question will be coming from Ben Reitzes of Melius. Please go ahead.
Operator: The next question will be coming from Ben Reitzes of Melius. Please go ahead.
The next question will be coming from.
Ben Reitzes: Yeah. Hey, guys. How are you?
Ben Reitzes: Yeah. Hey, guys. How are you?
Ben Redis of Melius. Please, go ahead.
Yeah. Hey, guys, how are you?
Tim Cook: Hi, Ben.
Tim Cook: Hi, Ben.
Thanks. Yeah, we, we basically determined that Google's, AI technology would provide the most capable foundation for, uh, AFM. Our, I'm sorry, Apple Foundation models.
Ben Reitzes: Hey, Tim. First question is on Google partnership again. I wanted to understand how you came to that decision with regard to the AI and Siri in particular, and if there's an opportunity for you guys to share in revenue, too, with that partnership like you do in search. Thanks.
Ben Reitzes: Hey, Tim. First question is on Google partnership again. I wanted to understand how you came to that decision with regard to the AI and Siri in particular, and if there's an opportunity for you guys to share in revenue, too, with that partnership like you do in search. Thanks.
Hi Ben.
And we believe that we can unlock a lot of experiences and and innovate in a key way, uh, due to the collaboration.
Um,
We'll continue to run on the device and run in private Cloud compute uh and maintain our our industry-leading privacy standards and doing so.
Hey Tim. Uh, first question is on Google partnership again. Uh, I wanted to understand how you came to that decision with regard to the AI and Siri in particular, and if there's an opportunity for you guys to share in revenue too with that partnership, like you do in search.
Tim Cook: Yeah. We basically determined that Google's AI technology would provide the most capable foundation for AFM, our... I, I'm sorry, Apple Foundation Models. And we believe that we can unlock a lot of experiences and innovate in a key way due to the collaboration. We'll continue to run on the device and run in Private Cloud Compute, and maintain our industry-leading privacy standards in doing so. In terms of the arrangement with Google, we're not releasing the details of that.
Tim Cook: Yeah. We basically determined that Google's AI technology would provide the most capable foundation for AFM, our... I, I'm sorry, Apple Foundation Models. And we believe that we can unlock a lot of experiences and innovate in a key way due to the collaboration. We'll continue to run on the device and run in Private Cloud Compute, and maintain our industry-leading privacy standards in doing so. In terms of the arrangement with Google, we're not releasing the details of that.
Thanks.
In terms of the, the, uh, arrangement, with Google, we're not releasing the the details of that.
Yeah, we basically determined that Google's AI technology would provide the most capable foundation for, uh, AFM—I'm sorry, Apple Foundation Models.
A bummer. Okay, well, I tried. So uh yeah, you knew it would be me. So the uh
the the next question is on gross margin. Um,
And we believe that we can unlock a lot of experiences, and innovate in a key way, uh, due to the collaboration.
Um,
We'll continue to run on the device and run in private cloud compute, uh, and maintain our industry-leading privacy standards in doing so.
In terms of the, the, uh, arrangement with Google, we're not releasing the, the details of that.
Ben Reitzes: Oh, bummer. Okay.
Ben Reitzes: Oh, bummer. Okay.
Tim Cook: Yeah.
Tim Cook: Yeah.
Ben Reitzes: Well, I tried.
Ben Reitzes: Well, I tried.
Tim Cook: You did.
Tim Cook: You did.
Ben Reitzes: So yeah, you knew it would be me. So the next question is on gross margin. You know, I'm pretty shocked, I gotta hand it to you, Tim, you know, that you're able to do 48% to 49%. What, what's really going on there? How are you doing that with this memory, the NAND prices? Is it due to mix that, that there's, you know, a good, a less hardware and more services, and services margins are going up? How, how are you doing it, to, to, to keep it at 48% to 49%?
Ben Reitzes: So yeah, you knew it would be me. So the next question is on gross margin. You know, I'm pretty shocked, I gotta hand it to you, Tim, you know, that you're able to do 48% to 49%. What, what's really going on there? How are you doing that with this memory, the NAND prices? Is it due to mix that, that there's, you know, a good, a less hardware and more services, and services margins are going up? How, how are you doing it, to, to, to keep it at 48% to 49%?
You know, I'm pretty shocked. I gotta hand it to you. Tim, I'm, you know, um, that you're able to do 48 to 49. What what's really going on there? How, how are you doing that with this memory with the Nan prices? Um, is it due to mix that that there's, you know, a good, uh, a less hardware and more services and services. Margins are going up. Um, how, how are you doing it? Um, to, to go to to, to keep it at 48, to 49?
Uh, bummer. Okay. Well, I tried. So, uh, yeah, you knew it would be me. So, the uh—
The next question is on gross margin. Um,
Kevan Parekh: ... Yeah, Ben, this is Kevan. How are you doing? Well, let me start maybe by just reflecting on the Q1 gross margin. I think we talked about the fact that we landed at 48.2%, so just above the high end of the range that we provided, you know, on the last call. I think if you look at that performance, you know, we were up 100 basis points sequentially. We talked about the fact that we had favorable mix. I mean, as you know, when we have a good product cycle, strong price cycle we're seeing for iPhone, that does lend itself to a bit more favorable opportunity on the mix and leverage side. So we're having a strong iPhone cycle, as Tim outlined, and so that also translated itself.
Kevan Parekh: ... Yeah, Ben, this is Kevan. How are you doing? Well, let me start maybe by just reflecting on the Q1 gross margin. I think we talked about the fact that we landed at 48.2%, so just above the high end of the range that we provided, you know, on the last call. I think if you look at that performance, you know, we were up 100 basis points sequentially. We talked about the fact that we had favorable mix. I mean, as you know, when we have a good product cycle, strong price cycle we're seeing for iPhone, that does lend itself to a bit more favorable opportunity on the mix and leverage side. So we're having a strong iPhone cycle, as Tim outlined, and so that also translated itself.
You know, I'm pretty shocked. I gotta hand it to you. Tim, I'm I, you know, um, that you're able to do 48 to 49. What what's really going on there? How, how are you doing that with this memory, the Nan prices? Um, is it due to mix that that there's, you know, a good, a less hardware and more services and services. Margins are going up. Um, how, how are you doing it? Um, to, to go to to, to keep it at 48, to 49?
Yeah, been, this is Kevin. How are you doing? Let me start, Maybe by just reflecting on the q1 gross margin. I think we talked about the fact that we landed at 48.2%. So, just above the high end of the range that we provided, you know, on the last call. And I think if you look at that performance, you know, we were up a 100 basis points sequentially. We talked about the fact that we had favorable mix. I mean, as you know, um, when we have a good product cycle strong price cycle, we're seeing for iPhone, that does lend itself to a bit more favorable opportunity on the mix and leverage side. So, we're having a strong iPhone cycle is Tim outlined and so that also translates itself, we talked about products, sequentially went up by 450 basis points. So I think in general, I think we're just seeing um, you know, favorable mixed Dynamics as well, you know, Services continues to contribute as well that business is growing, you know, um, you know, double digit.
So that also is a contributor and I think that, you know, as we looked at our guidance, you know, we're providing a similar range to where we reported in December and there's going to be a few puts and takes, you know, we do expect to see favorable mix into Services as you know, when we move from q1 to Q2 that tends to be the case and that's partly offset by a seasonal loss of Leverage. So there'll be puts and takes, but, you know, again, we feel pretty good about the guide of 48 to 49%, um, which is similar to the range. We reported in December,
Kevan Parekh: So we talked about products sequentially went up by 450 basis points. So I think, in general, I think we're just seeing, you know, favorable mix dynamics as well. You know, services continue to contribute as well. That business is growing, you know, double digits, so that also is a contributor. And I think that, you know, as we looked at our guidance, you know, we're providing a similar range to where we reported in December, and there's gonna be a few puts and takes. You know, we do expect to see favorable mix in the services. As you know, when we move from Q1 to Q2, that tends to be the case, and that's partly offset by a seasonal loss of leverage.
So we talked about products sequentially went up by 450 basis points. So I think, in general, I think we're just seeing, you know, favorable mix dynamics as well. You know, services continue to contribute as well. That business is growing, you know, double digits, so that also is a contributor. And I think that, you know, as we looked at our guidance, you know, we're providing a similar range to where we reported in December, and there's gonna be a few puts and takes. You know, we do expect to see favorable mix in the services. As you know, when we move from Q1 to Q2, that tends to be the case, and that's partly offset by a seasonal loss of leverage.
Wow, okay, great. Thank you. All right, thanks, Ben, operator, could we get the next question, please?
The next question will be coming from David locked of UBS.
Yeah, been, this is Kevin. How are you doing? Let me start, Maybe by just reflecting on the q1 gross margin. I think we talked about the fact that we landed at 48.2%. So, just above the high end of the range that we provided, you know, in the last call. And I think if you look at that performance, you know, we were up a 100 basis point sequentially. We talked about the fact that we had favorable mix. I mean, as you know, um, when we have a good product cycle, strong product cycle, we're seeing for iPhone, that does lend itself to a bit more favorable opportunity on the mix and leverage side. So, we're having a strong iPhone cycle is timeline. And so, that also translated itself, we talked about products sequentially went up by 450%, um, you know, favorable mixed Dynamics as well, you know, Services continues to contribute as well that business is growing, you know, um, you know, double digits. So that also is a contributor, and I think that, you know, as we looked at our guidance, you know, we're providing a similar range to where we reported in December, and this is going to be a few puts and takes, you know, we do expect to see favorable mix in the services. As, you know, when we move from q1 to Q2 but
Kevan Parekh: So there'll be puts and takes, but, you know, again, we feel pretty good about the guide of 48 to 49%, which is similar to the range we reported in December.
So there'll be puts and takes, but, you know, again, we feel pretty good about the guide of 48 to 49%, which is similar to the range we reported in December.
Tends to be the case, and that's partly offset by a seasonal loss of leverage. So, there'll be some takes. But, you know, again, we feel pretty good about the guide of 48 to 49%, um, which is similar to the range we reported in December.
Ben Reitzes: Wow! Okay, great. Thank you.
Ben Reitzes: Wow! Okay, great. Thank you.
[Company Representative] (Apple): All right. Thanks, Ben. Operator, could we get the next question, please?
Suhasini Chandramouli: All right. Thanks, Ben. Operator, could we get the next question, please?
Wow, okay, great. Thank you. All right, thanks, Ben. Operator, could we get the next question, please?
Operator: The next question will be coming from David Vogt of UBS.
Operator: The next question will be coming from David Vogt of UBS.
David Vogt: Great, thanks, guys, for taking my question. Maybe, maybe Tim or Kevan, if we could pull out a little bit. Can you help us understand how you're thinking about the overall kind of smartphone market demand, particularly given where memory prices are headed? And we've heard some conversations with some other OEMs, as well as component providers that are worried about either the availability of components, potential market weakness in terms of demand destruction, and some of the actions to offset or higher prices. I know you don't give outlooks for the full year, but how are you thinking about all of those different vectors and what that might mean for the overall smartphone market, and then ultimately, what that might mean for demand for iPhones as we move through the rest of this calendar year?
David Vogt: Great, thanks, guys, for taking my question. Maybe, maybe Tim or Kevan, if we could pull out a little bit. Can you help us understand how you're thinking about the overall kind of smartphone market demand, particularly given where memory prices are headed? And we've heard some conversations with some other OEMs, as well as component providers that are worried about either the availability of components, potential market weakness in terms of demand destruction, and some of the actions to offset or higher prices. I know you don't give outlooks for the full year, but how are you thinking about all of those different vectors and what that might mean for the overall smartphone market, and then ultimately, what that might mean for demand for iPhones as we move through the rest of this calendar year?
The next question will be coming from David Lock of UBS.
Great. Thanks guys. For taking my question. Maybe maybe Tim or Kevin. If we could pull out a little bit, do you help us understand how you're thinking about the overall kind of smartphone market demand particularly even where memory prices are headed and we've heard some conversations with some other oems as well as component providers that are worried about either the availability of components potential Market weakness, in terms of demand destruction, if some of the actions to offset or higher prices, I know you don't give out looks for the full year. But how are you thinking about all of those different vectors and what that might mean for the overall smartphone market? And then, ultimately what that might mean for demand, for iPhones as we move through the rest of this calendar year.
Yeah. On the on the supply side, uh, I had made comments earlier about the constraint that we are seeing in Q2, you know, we and and that's reflected in the revenue guidance that uh, Kevin gave earlier the constraint as I'd mentioned is due to the uh, Advanced node capacity and
Tim Cook: Yeah, on the supply side, I had made comments earlier about the constraint that we are seeing in Q2. You know, and that's reflected in the revenue guidance that Kevan gave earlier. The constraint, as I'd mentioned, is due to the advanced node capacity, and it's really a result of growing so well in Q1 with the 23%, and having less flexibility, partly due to that in the process to increase it as much as we would like to increase it. Beyond Q2, I don't really want to comment on supply. You know, supply is a function of a lot of things in the industry that move around a lot, so I wouldn't want to comment on that.
Tim Cook: Yeah, on the supply side, I had made comments earlier about the constraint that we are seeing in Q2. You know, and that's reflected in the revenue guidance that Kevan gave earlier. The constraint, as I'd mentioned, is due to the advanced node capacity, and it's really a result of growing so well in Q1 with the 23%, and having less flexibility, partly due to that in the process to increase it as much as we would like to increase it. Beyond Q2, I don't really want to comment on supply. You know, supply is a function of a lot of things in the industry that move around a lot, so I wouldn't want to comment on that.
Great. Thanks guys. For taking my question. Maybe maybe Tim or Kevin. If we could pull out a little bit, do you help us understand how you're thinking about the overall kind of smartphone market demand particularly even where memory prices are headed and we've heard some conversations with some other oems as well as component providers. That a word about either the availability of components potential Market weakness, in terms of demand destruction, if some of the actions to offset or higher prices, I know you don't give out looks for the full year. But how are you thinking about all of those different vectors and what that might mean for the overall smartphone market? And then, ultimately what that might mean for demand, for iPhones as we move through the rest of this calendar year.
Yeah, on the, on the supply side, uh, I had made comments earlier about the constraints.
um, beyond beyond Q2 I I I don't really
want to comment on Supply, uh,
is due to the, uh, advanced node capacity and
Uh, you know, it's uh, supplies of function of a lot of things in the in the industry that move around a lot. So I I would want to comment on that.
Um, I and I commented before on the, on memory pricing.
uh, and so, um,
It's really, uh, a result of growing, uh, so well in Q1 with the 23%, and I having less flexibility.
I I hopefully that answers your question.
Oh, in terms of the, in terms of smartphone demand, um,
Uh, partly due to that in the, in the, in the process to increase it as much as we would like to increase it.
Um, beyond Q2, I don't really—
Want to comment on supply, uh,
You know, I we believe that based on the the information that we've got is we gain share in the December quarter.
Tim Cook: I commented before on memory pricing. Hopefully, that answers your question.
Uh, you know is it's uh, supplies of function of a lot of things in the in the industry that move around a lot. So I I would want to comment on that.
I commented before on memory pricing. Hopefully, that answers your question.
Um, I and I commented before on the, on memory pricing.
uh, and so, um,
Uh, obviously the market wasn't growing at at 23%, so we we feel good about uh, uh, doing that. And, um, but I, I don't, I wouldn't want to predict how the market reacts, and the, in the future, it's very difficult to do that.
David Vogt: It does.
David Vogt: It does.
Tim Cook: Oh, in terms of smartphone demand-
Tim Cook: Oh, in terms of smartphone demand-
I hope that answers your question.
David Vogt: Yeah.
David Vogt: Yeah.
Tim Cook: You know, we believe that based on the information that we've got is we gained share in the December quarter. Obviously, the market wasn't growing at 23%, so we feel good about doing that. But I don't -- I wouldn't want to predict how the market reacts in the future. It's very difficult to do that.
Tim Cook: You know, we believe that based on the information that we've got is we gained share in the December quarter. Obviously, the market wasn't growing at 23%, so we feel good about doing that. But I don't -- I wouldn't want to predict how the market reacts in the future. It's very difficult to do that.
Oh, in terms of the, in terms of smartphones demand, um,
You know, we believe that, based on the information that we've got, we gained share in the December quarter.
Uh, obviously the market wasn't growing at, at 23%, so we, we feel good about, uh, uh, doing that. And, um, but I, I don't, I wouldn't want to predict how the market reacts, and the, in the future, it's very difficult to do that.
David Vogt: Got it. At the risk of not getting this answered, I'm gonna follow up with, can you maybe help us understand, you know, you mentioned there's a range of options that you're looking at. How should we think about kind of like LTAs in the marketplace? I mean, is that an option as we move through the year, or is it more spot-based from an OpEx perspective, particularly around memory? Just want to get a better sense for how we should think about kind of the dynamics in the marketplace.
David Vogt: Got it. At the risk of not getting this answered, I'm gonna follow up with, can you maybe help us understand, you know, you mentioned there's a range of options that you're looking at. How should we think about kind of like LTAs in the marketplace? I mean, is that an option as we move through the year, or is it more spot-based from an OpEx perspective, particularly around memory? Just want to get a better sense for how we should think about kind of the dynamics in the marketplace.
Got it at at the risk of not getting this answered. I'm going to follow up with. Can you maybe help us understand? You know, you mentioned there's a range of options that you're looking at. Um, how do how should we think about kind of like ltas in the marketplace? I mean is that an option as we move through the year or is there more spot based from a on a perspective, particularly around memory, just want to get a better sense per, how we should think about, kind of the Dynamics in The Market Place. Uh, it's a range and and so I don't want to get more specific than that. I mean, there are there are different, uh, lovers that that we can push and, and who knows how successful they'll be, but there's just a range of options
Great. Thanks guys. Yeah, great. Thank you. David operator, could we get the next question, please?
Will not be taking question from 1.
1, 1 minute from Bank of America except for pronunciation.
That's fine. Thank you. Um,
Tim Cook: It's a range, and so I don't want to get more specific than that. I mean, there are different levers that we can push, and who knows how successful they'll be? But there's just a range of options.
Tim Cook: It's a range, and so I don't want to get more specific than that. I mean, there are different levers that we can push, and who knows how successful they'll be? But there's just a range of options.
Got it at at the risk of not getting this answered. I'm going to follow up with. Can you maybe help us understand? You know, you mentioned there's a range of options that you're looking at. Um, how do how should we think about kind of like ltas in the marketplace? I mean is that an option as we move through the year or is it more spot based from a on a prospective, particularly around memory, just trying to get a better sense for how we should think about kind of the Dynamics in the marketplace. Uh, it's a range and and so I don't want to get more specific than that. I mean, there are there are different, uh, lovers that that we can push and, and who knows how successful they'll be, but there's just a range of options
David Vogt: Great. Thanks, guys.
David Vogt: Great. Thanks, guys.
Tim Cook: Yeah.
Tim Cook: Yeah.
[Company Representative] (Apple): Great. Thank you, David. Operator, could we get the next question, please?
Suhasini Chandramouli: Great. Thank you, David. Operator, could we get the next question, please?
Tim on the services you you grew up pretty impressive 14% And and I know you said uh that the App Store was a record for the December quarter. But third party data is showing a notable deceleration in app store growth. Um maybe 7% in the December quarter or relative to the year 14 was hoping if you could maybe confirm that and secondarily if it's correct uh what might be some of the drivers of that and
Great, thanks, guys. Yeah, great. Thank you. David, operator, could we get the next question, please?
Operator: We'll now be taking question from Wamsi Mohan from Bank of America. Sorry for your pronunciation.
Operator: We'll now be taking question from Wamsi Mohan from Bank of America. Sorry for your pronunciation.
Kevan Parekh: That's fine. Thank you. Tim, on services, you grew a pretty impressive 14%, and I know you said that the App Store was a record for the December quarter. But third-party data is showing a notable deceleration in App Store growth, maybe 7% in the December quarter, relative to your 14% growth. I was hoping if you could maybe confirm that, and secondarily, if it's correct, what might be some of the drivers of that, and what could be things that you could do to reverse that in future quarters? And I have a follow-up. Hey, Wamsi, it's Kevan here. Look, I think we want to reiterate the fact that during the summer quarter, you know, we had a quarterly record on the App Store.
Wamsi Mohan: That's fine. Thank you. Tim, on services, you grew a pretty impressive 14%, and I know you said that the App Store was a record for the December quarter. But third-party data is showing a notable deceleration in App Store growth, maybe 7% in the December quarter, relative to your 14% growth. I was hoping if you could maybe confirm that, and secondarily, if it's correct, what might be some of the drivers of that, and what could be things that you could do to reverse that in future quarters? And I have a follow-up.
We will not be taking a question from Moen at Bank of America. Sorry for the pronunciation.
That's fine. Thank you. Um,
What could be things that you could do to reverse uh that in future? Quarters that have a follow up a onesie. It's Kevin here. Um, like I think I think we want to reiterate the fact that during the summer quarter, you know, we had a quarterly record on the App Store, as, you know, we don't provide, you know, specific color on how the Individual Services categories have done.
But again, if we step back, I think we, we saw, you know, again, broad-based, um, growth across all the different categories also across, you know, various geographies, we had, um, you know, all-time records in both developed and Emerging Markets as well. So and double digit growth in both of those too. And so I think in general, um, you know, we don't provide, you know, the caller at the detail, you know, Services level.
Kevan Parekh: Hey, Wamsi, it's Kevan here. Look, I think we want to reiterate the fact that during the summer quarter, you know, we had a quarterly record on the App Store.
Kevan Parekh: As you know, we don't provide, you know, specific color on how the individual services categories have done. But again, if we step back, I think we saw, you know, again, broad-based growth across all the different categories, also across, you know, various geographies. We had, you know, all-time records in both developed and emerging markets as well, so, and double-digit growth in both of those, too. And so I think in general, you know, we don't provide, you know, the color at the detailed, you know, services level.
As you know, we don't provide, you know, specific color on how the individual services categories have done. But again, if we step back, I think we saw, you know, again, broad-based growth across all the different categories, also across, you know, various geographies. We had, you know, all-time records in both developed and emerging markets as well, so, and double-digit growth in both of those, too. And so I think in general, you know, we don't provide, you know, the color at the detailed, you know, services level.
Tim on the services you you grew up pretty impressive 14% And and I know you said uh, that the App Store was a record for the December quarter. But third party data is showing a notable deceleration in app store growth. Um, maybe 7% in the December quarter relative to your 14% growth. I was hoping if you could maybe confirm that and secondarily if it's correct. Uh, what might be some of the drivers of that and what what could be things that you could do to reverse, uh, that in future quarters that have a follow up. Hey wamsi. It's Kevin here. Um, like I think I think you want to reiterate the fact that it's during the summer quarter, you know, we had a quarterly record on the App Store, as, you know, we don't provide, you know, specific color on how the Individual Services categories have done. But again, if we step back, I think we, we saw, you know, again, broad-based, um, growth across all the different categories also across, you know, various geographies, we had, um, you know, all-time records in both developed and Emerging Markets as well. So and double digit grow.
Okay, thanks Kevin. Um, I I guess back to the memory price. Um I appreciate you have a range of options uh, to address that historically. Uh, Apple's not used to pricing level unless, you know, FX markets, got, maybe very dislocated to prevent Arbitrage or or issues like that, but, uh, give them some of these unprecedented Moves In memory would pricing be a lever that you would be willing to, to pull or push and, uh, outside of every other thing that, you know, outside of everything else that you can do. Yeah, I wouldn't want to speculate on that 1.
Growth in both of those too. And so I think in general, um, you know, we don't provide, you know, the caller at the detailed, you know, Services level.
Wamsi Mohan: Okay, thanks, Kevin. I guess back to the memory price. I appreciate you have a range of options to address that. Historically, Apple's not used a pricing lever unless, you know, FX markets got maybe very dislocated to grow an arbitrage or issues like that. But, given some of these unprecedented moves in memory, would pricing be a lever that you would be willing to pull or push and, outside of every other thing that, you know, outside of everything else that you can do?
Wamsi Mohan: Okay, thanks, Kevin. I guess back to the memory price. I appreciate you have a range of options to address that. Historically, Apple's not used a pricing lever unless, you know, FX markets got maybe very dislocated to grow an arbitrage or issues like that. But, given some of these unprecedented moves in memory, would pricing be a lever that you would be willing to pull or push and, outside of every other thing that, you know, outside of everything else that you can do?
Okay, thanks then, yeah, thanks lumsy. Operator, could we have the next question, please?
When I go to semi chattery of JP Morgan, please go ahead, your line is open.
Tim Cook: Yeah, I wouldn't want to speculate on that one.
Tim Cook: Yeah, I wouldn't want to speculate on that one.
Okay, thanks, Kevin. Um, I guess back to the memory price, um, I appreciate you have a range of options, uh, to address that historically. Um, Apple’s not used a pricing level unless, you know, FX markets got maybe very dislocated to prevent arbitrage or, or issues like that. But, uh, given some of these unprecedented losses in memory, would pricing be a lever that you would be willing to, to pull or push, and, uh, outside of every other thing that, you know, outside of everything else that you can do. Yeah, I wouldn’t want to speculate on that one.
Wamsi Mohan: Okay. Thanks, Tim.
Wamsi Mohan: Okay. Thanks, Tim.
Tim Cook: Yeah.
Tim Cook: Yeah.
[Company Representative] (Apple): Thanks, Wamsi. Operator, could we have the next question, please?
Suhasini Chandramouli: Thanks, Wamsi. Operator, could we have the next question, please?
Okay, thanks then. Yeah, thanks, Lumsy. Operator, could we have the next question, please?
Operator: We'll now go to Samik Chatterjee of JP Morgan. Please go ahead. Your line is open.
Operator: We'll now go to Samik Chatterjee of JP Morgan. Please go ahead. Your line is open.
Samik Chatterjee: Yep. Hi, thanks for taking my questions. Maybe for the first one, I'm just looking at your capital investment in the first quarter, which did moderate from the last one, and wondering if the partnership with Google on Gemini and sort of help collaboration to develop the next generation of Apple Foundation Models, does that have any near-term sort of impact on your intent to use Apple Private Cloud? I know you emphasize sort of the role Apple Private Cloud plays in the long term, but are there any changes on that front through this collaboration? Any thoughts around that, and I have a quick follow-up. Thank you.
Samik Chatterjee: Yep. Hi, thanks for taking my questions. Maybe for the first one, I'm just looking at your capital investment in the first quarter, which did moderate from the last one, and wondering if the partnership with Google on Gemini and sort of help collaboration to develop the next generation of Apple Foundation Models, does that have any near-term sort of impact on your intent to use Apple Private Cloud? I know you emphasize sort of the role Apple Private Cloud plays in the long term, but are there any changes on that front through this collaboration? Any thoughts around that, and I have a quick follow-up. Thank you.
When I go to semi, Chattery of JPMorgan, please go ahead. Your line is open.
Kevan Parekh: Yeah, sure. I think this is Kevan here. I think in general, you know, as Tim outlined, we weren't going to provide any details on our, you know, arrangement and collaboration with Google. Just speaking of CapEx in general, you know, as you know, we have a hybrid, you know, model for CapEx. And so I think that, you know, what happens is our CapEx can be volatile, independent of kind of the volume and performance of our business. And as you know, our CapEx is made of several different line items that include tooling, our facilities, retail investments, or reinvestments in our retail store, data centers. And on tooling and data centers, we leverage this hybrid model that I mentioned before, which we leverage a combination of first and third-party capacity.
Kevan Parekh: Yeah, sure. I think this is Kevan here. I think in general, you know, as Tim outlined, we weren't going to provide any details on our, you know, arrangement and collaboration with Google. Just speaking of CapEx in general, you know, as you know, we have a hybrid, you know, model for CapEx. And so I think that, you know, what happens is our CapEx can be volatile, independent of kind of the volume and performance of our business. And as you know, our CapEx is made of several different line items that include tooling, our facilities, retail investments, or reinvestments in our retail store, data centers. And on tooling and data centers, we leverage this hybrid model that I mentioned before, which we leverage a combination of first and third-party capacity.
In the first quarter, which did moderate, um, from the last one, and wondering if the partnership with, um, Google on Gemini and sort of help collaboration to develop the next generation of Apple foundation and models—does that have any near-term sort of, uh, impact on your intent to use Apple Private Cloud? I know you emphasize sort of the role Apple Private Cloud plays in the long term, but are there any changes on that front through this collaboration? Um, any thoughts around that? And I have a quick follow-up. Thank you.
Yeah, sure I think this is Kevin here. I think in general, you know. Um, as Tim outline we weren't going to provide any details on our, you know, Arrangement and collaboration with Google. Um, just speaking of capex in general, um, you know as you know, we have a hybrid, you know, model for capex. And so I think that um, you know, what happens is our capex can be volatile, volatile independent of, kind of the volume of the performance of our business. And as you know, our capex is made of, um, several different line items that include tooling our facilities retail Investments or investments in our retail store, data centers and on tooling and data centers. We we we leverage this hybrid model that I mentioned before, which we leverage a combination of first and third party uh capacity. So in general it's hard to read into the capex and you know, draw any conclusions. And so I think that would just say there's going to be some EPs and flows in capex last year. You remember, we did build out our private Cloud compute environment and so we did have capex spending related to that in our in our results in December.
Kevan Parekh: In general, it's hard to read into the CapEx and, you know, draw any conclusions. So I think I would just say there's going to be some ebbs and flows in CapEx. Last year, you'll remember, we did build out our Private Cloud Compute environment, and so we did have CapEx spending related to that in our results in December.
In general, it's hard to read into the CapEx and, you know, draw any conclusions. So I think I would just say there's going to be some ebbs and flows in CapEx. Last year, you'll remember, we did build out our Private Cloud Compute environment, and so we did have CapEx spending related to that in our results in December.
Got it, got it. And my follow-up probably is for you. Um again um you did mention product growth margin and the sort of drivers there for the uh product gross margin Improvement. Um did when you set up highlighted mix as a driver. Can you just sort of talk through what are the big differences and makes you seeing for iPhone 17 versus 16 and um the tariffs and tariffs coming in more favorable play a role at all and what you're expecting for tariffs for the next quarter?
Samik Chatterjee: Got it. Got it. My follow-up probably is for you, again. You did mention product gross margin and the sort of drivers there for the product gross margin improvement. When you sort of highlighted mix as a driver, can you just sort of talk through what are the big differences in mix you're seeing for iPhone 17 versus 16? And, did tariffs and tariffs coming in more favorable play a role at all, and what are you expecting for tariffs for the next quarter?
Samik Chatterjee: Got it. Got it. My follow-up probably is for you, again. You did mention product gross margin and the sort of drivers there for the product gross margin improvement. When you sort of highlighted mix as a driver, can you just sort of talk through what are the big differences in mix you're seeing for iPhone 17 versus 16? And, did tariffs and tariffs coming in more favorable play a role at all, and what are you expecting for tariffs for the next quarter?
Yeah, sure I think this is Kevin here. I think in general, you know. Um, as Tim outline we weren't going to provide any details on our, you know, Arrangement and collaboration with Google. Um, just speaking of capex in general, um, you know as you know, we have a hybrid, you know, model for capex. And so I think that um, you know, what happens is our capex can be volatile, volatile independent of, kind of the volume of the performance of our business. And as you know, our capex is made of, um, several different line items that include tooling our facilities retail Investments or investments in our retail store, data centers and on tooling and data centers. We we we leverage this hybrid model that I mentioned before, which we leverage a combination of first and third party uh capacity. So in general it's hard to read into the capex and you know, draw any conclusions. And so I think that would just say there's going to be some EPs and flows in capex last year. You remember, we did build out our private Cloud compute environment and so we did have capex spending related to that in our in our results in December.
Kevan Parekh: Yeah, so there, there's a few things to unpack there. So on the overall margin on product side, I think I mentioned that we had favorable mix of products and leverage. I think given the strong iPhone cycle we're seeing, that was, I would say, probably a higher favorability than you might have seen in maybe other cycles. And as well, as you know, in Q1, typically we do see the impact of the cost structure of our new products that we launch. And in this case, we are seeing a more favorable offset from mix of products and leverage versus historical, you know, sequential changes from Q4 to Q1.
Kevan Parekh: Yeah, so there, there's a few things to unpack there. So on the overall margin on product side, I think I mentioned that we had favorable mix of products and leverage. I think given the strong iPhone cycle we're seeing, that was, I would say, probably a higher favorability than you might have seen in maybe other cycles. And as well, as you know, in Q1, typically we do see the impact of the cost structure of our new products that we launch. And in this case, we are seeing a more favorable offset from mix of products and leverage versus historical, you know, sequential changes from Q4 to Q1.
Correct, correct. And my follow-up probably is for you. Um, again, you did mention product gross margin and the sort of drivers there for the product gross margin improvement. Um, when you sort of highlighted mix as a driver, can you just talk through what are the big differences in mix you’re seeing for iPhone 17 versus 16? And, um, the tariffs—are tariffs coming in more favorably or playing a role at all? And what are you expecting for tariffs for the next quarter?
Yeah, so there's there's a few things that unpack there. Um, so on the overall margin on product side, I think I mentioned that we had favorable mix of products and leverage. I think given the strong iPhone cycle we're seeing that was um, I would say probably a higher favorability than you might have seen maybe other cycles and as well as, you know, in q1, typically, we do see the impact of the cost structure of our new products that we launched. And in this case, we are seeing a more favorable offset from from mix of of products and leverage, uh, versus historical, uh, you know, sequential changes from Q4 to q1 on the Tariff piece. We had outlined a amount of 1.4 billion for the December quarter and we landed roughly in in that range and, you know, at that level
Thank you.
Stomach.
Up, please.
Well, now go to Christmas Sankar of TD Cowen. Please go ahead.
Kevan Parekh: On the tariff piece, we had outlined an amount of $1.4 billion for the December quarter, and we landed roughly in that range, and, you know, at that level.
On the tariff piece, we had outlined an amount of $1.4 billion for the December quarter, and we landed roughly in that range, and, you know, at that level.
Yeah, so there's a few things to unpack there. Um, so on the overall margin on the product side, I think I mentioned that we had favorable mix of products and leverage. I think, given the strong iPhone cycle we're seeing, that was, um, I would say probably a higher favorability than you might have seen maybe other cycles. And as well as, you know, in Q1, typically, we do see the impact of the cost structure of our new products that we launched. And in this case, we are seeing a more favorable offset from mix of products and leverage, uh, versus historical, uh, you know, sequential changes from Q4 to Q1. On the tariff piece, we had outlined an amount of $1.4 billion for the December quarter, and we landed roughly in that range and, you know, at that level.
Samik Chatterjee: Thank you.
Samik Chatterjee: Thank you.
Yeah. Hi. Thanks for taking my question. The first 1 I have for us for Tim. I think you touched upon this earlier on the Gemini integration and apple foundational model how to think about kind of like the, you know, the difference between apple Foundation model functionality and third-party models like, you know, does the Apple Foundation model evolved to a different level in the AI software stack? How to think about it as your partner with third-party Frontier models and how to follow up
[Company Representative] (Apple): Awesome. Thank you, Samik. Operator, could we have the next question, please?
Suhasini Chandramouli: Awesome. Thank you, Samik. Operator, could we have the next question, please?
Thank you.
Yeah, uh Chris. You should think of it as a collaboration?
Awesome. Thank you so much. Operator, could we have the next question, please?
Operator: We'll now go to Krish Sankar of TD Cowen. Please go ahead.
Operator: We'll now go to Krish Sankar of TD Cowen. Please go ahead.
Tim Cook: Yeah, hi. Thanks for taking my question. The first one I have for us, for Tim, I think you touched upon this earlier on the Gemini integration and Apple foundational model. How to think about kind of like the, you know, the difference between Apple foundational model functionality and third-party models? Like, you know, does the Apple foundational model evolve to a different layer in the AI software stack? How to think about it as you partner with third-party frontier models? I had a follow-up. Yeah, Krish, you should think of it as a collaboration. And we'll, we'll obviously independently continue to do some of our own stuff, but you should think of what is going to power the personalized version of Siri as the, a collaboration with Google.
Krish Sankar: Yeah, hi. Thanks for taking my question. The first one I have for us, for Tim, I think you touched upon this earlier on the Gemini integration and Apple foundational model. How to think about kind of like the, you know, the difference between Apple foundational model functionality and third-party models? Like, you know, does the Apple foundational model evolve to a different layer in the AI software stack? How to think about it as you partner with third-party frontier models? I had a follow-up.
Well, now go to Chris Sankar of TD Cowen. Please go ahead.
Uh, not uh, and we'll, we'll obviously independently continue to do uh, some of our own stuff but you should think of what is going to power.
The personalized version of Siri is the uh, a collaboration with Google.
Tim Cook: Yeah, Krish, you should think of it as a collaboration. And we'll, we'll obviously independently continue to do some of our own stuff, but you should think of what is going to power the personalized version of Siri as the, a collaboration with Google.
Yeah, hi, thanks for taking my question. The first thing I have for us for Tim, I think you touched upon this earlier on the Gemini integration, an apple foundational model how to think about kind of like the, you know, the difference between apple Foundation model functionality and third party models. Like, you know, does the Apple Foundation model evolved to a different layer in the AI software stack? How to think about it as you partner with third party, Frontier models, I had a follow-up
Yeah, uh, Chris. You should think of it as a collaboration?
Uh, not uh, and will will obviously independently continue to do uh some of our own stuff, but you should think of what is going to power.
The personalized version of Siri as the, uh, a collaboration with Google.
[Company Representative] (Apple): Got it. Got it. Awesome. A quick follow-up for maybe Kevan or Tim. Just, you know, a lot of discussion on memory pricing. Given that the memory constraint or commodities scarcity is impacting both the smartphone and the PC markets, and Apple, arguably having more purchasing power, do you think this is a chance for you to increase your market share, both in iPhone and Mac, at the expense of competition, who might have more constraints in getting access to memory?
Krish Sankar: Got it. Got it.
Awesome. A quick follow-up for maybe Kevan or Tim. Just, you know, a lot of discussion on memory pricing. Given that the memory constraint or commodities scarcity is impacting both the smartphone and the PC markets, and Apple, arguably having more purchasing power, do you think this is a chance for you to increase your market share, both in iPhone and Mac, at the expense of competition, who might have more constraints in getting access to memory?
Got it, got it. So, the little a quick follow up for maybe Kevin or Tim. Uh, just, you know, a lot of discussion on memory pricing, um, given that the memory constraint or Commodities capacity is impacting both the smartphone and the PC markets and apple, arguably, having more purchasing power, do you think this is a chance for you to increase your market? Share both in iPhone and Mac at the expense of competition? Who might have more constraints in getting access to memory? Yeah, I don't really want to talk about uh, kind of what has happened and we we do believe as I shared that iPhone games, share and the December quarter. And if you look at Mac for the full year of full calendar year 25, we also believe we can share
And so we we feel uh very good about our position.
Thanks Jim. Yeah.
Hey, Chris operator, could we have the next question, please?
Got it. So Melvin, a quick follow-up for maybe Kevin or Tim. Uh, just, you know, a lot of discussion on memory pricing. Given that the memory constraint or commodities capacity is impacting both the smartphone and the PC markets, and Apple, arguably, having more purchasing power, do you think this is a chance for you to increase your margin?
When I go to Atif Malik calling from City, please go ahead.
Tim Cook: Yeah, I'd only want to talk about, kind of what has happened. We do believe, as I had shared, that iPhone gained share in the December quarter. If you look at Mac for the full year of, full calendar year of 2025, we also believe we gained share. So we feel very good about our position.
Tim Cook: Yeah, I'd only want to talk about, kind of what has happened. We do believe, as I had shared, that iPhone gained share in the December quarter. If you look at Mac for the full year of, full calendar year of 2025, we also believe we gained share. So we feel very good about our position.
Market share, both in iPhone and Mac, at the expense of competition who might have more constraints in getting access to memory.
Yeah, I don't really want to talk about, uh, kind of what has happened, and we—we do believe, as I shared, that iPhone gained share in the December quarter. And if you look at Mac, for the full calendar year '25, we also believe we gained share.
Hi. Thank you for taking my question, the first 1 for 10, 10, some of the industry pundits are comparing uh, the iPhone 17, uh, upgrade cycle to the 2020 2021 years. Uh, as some of the iPhone 12, 13, users upgrade curious if you agree with that view. And also, if you can layer on the impact from Apple intelligence to the refresh rate,
And so we, we feel, uh,
Very good about our position.
Samik Chatterjee: Thanks, Tim.
Krish Sankar: Thanks, Tim.
Tim Cook: Yeah.
Tim Cook: Yeah.
[Company Representative] (Apple): Thank you, Krish. Operator, could we have the next question, please?
Suhasini Chandramouli: Thank you, Krish. Operator, could we have the next question, please?
Thank you. Thank you, Chris. Operators, could we have the next question, please?
Operator: ... We're now going to Atif Malik, calling from Citi. Please go ahead.
Operator: ... We're now going to Atif Malik, calling from Citi. Please go ahead.
It's on unique characteristics and so I I wouldn't uh, compare it to a specific 1. I I think uh
Atif Malik: Hi, thank you for taking my question. The first one for Tim. Tim, some of the industry pundits are comparing the iPhone 17 upgrade cycle to the 2020, 2021 years as some of the iPhone 12, 13 users upgrade. Curious if you agree with that view, and also if you can layer on the impact from Apple Intelligence to the refresh rate.
Atif Malik: Hi, thank you for taking my question. The first one for Tim. Tim, some of the industry pundits are comparing the iPhone 17 upgrade cycle to the 2020, 2021 years as some of the iPhone 12, 13 users upgrade. Curious if you agree with that view, and also if you can layer on the impact from Apple Intelligence to the refresh rate.
Go ahead.
iPhone 17, the family of 17 is a unique product that brings
Uh, several very compelling features in 1 product and it it has done extremely well.
Uh, and so we've we feel uh, you know, quite good about it.
Tim Cook: I think each iPhone cycle has its own unique characteristics, and so I wouldn't compare it to a specific one. I think iPhone 17, the family of 17 is a unique product that brings several very compelling features in one product, and it has done extremely well. And so we feel, you know, quite good about it.
Tim Cook: I think each iPhone cycle has its own unique characteristics, and so I wouldn't compare it to a specific one. I think iPhone 17, the family of 17 is a unique product that brings several very compelling features in one product, and it has done extremely well. And so we feel, you know, quite good about it.
Hi. Thank you for taking my questions. The first one for Tim. Tim, some of the industry pundits are comparing the iPhone 17 upgrade cycles to the 2020-2021 years, as some of the iPhone 12, 13 users upgrade. Curious if you agree with that view. And also, if you can layer on the impact from Apple Intelligence to the refresh rate,
Can I talk about? I'll just add to Tim's comment that we talked about the fact we have a large and diverse installed base of customers, and to this product has really resonated with multiple cohorts, whether you're on older devices or newer, newer iPhones as well. So we've seen really strong reactions to the product lineup.
I think each iPhone cycle has its own unique characteristics and so I I wouldn't uh compare it to a specific 1. I I think uh
iPhone 17, the family of 17, is a unique product that brings
Great. As my follow up, the blood discussion Supply constraints and I'm surprised that you guys are constrained on Advanced packaging. As you generally get your share at, at, at the, the big Foundry. And how long will these, uh, Supply impact your ability to ship to True demand?
Its.
Uh, several very compelling features in one product, and it has done extremely well.
Kevan Parekh: Atif, I'll just add to Tim's comment, that we talked about the fact we have a large and diverse installed base of customers, and so this product has really resonated with multiple cohorts, whether you're on older devices or newer, newer iPhones as well. So we've seen really strong reaction to the product lineup.
Kevan Parekh: Atif, I'll just add to Tim's comment, that we talked about the fact we have a large and diverse installed base of customers, and so this product has really resonated with multiple cohorts, whether you're on older devices or newer, newer iPhones as well. So we've seen really strong reaction to the product lineup.
Uh, and so we've, we feel, uh, you know, quite good about it.
It's difficult to estimate demand. When you haven't, uh, met the demand.
And so, uh, we we've obviously we have internal estimates on that, but I I don't I don't want to share those.
You know, if I just added Tim's comment that we talked about—the fact we have a large and diverse install base of customers. And so, this product has really resonated with multiple cohorts, whether you're on older devices or newer, newer iPhones as well. So, we've seen really strong reactions to the product lineup.
Atif Malik: Great. As my follow-up, there was a lot of discussion, supply constraints, and I'm surprised that you guys are constrained on advanced packaging, as you generally get your share at the big foundry. How long will these supply impact your ability to ship to true demand?
Atif Malik: Great. As my follow-up, there was a lot of discussion, supply constraints, and I'm surprised that you guys are constrained on advanced packaging, as you generally get your share at the big foundry. How long will these supply impact your ability to ship to true demand?
Um, but it's, it's very difficult and just to be clear. It's uh, the advanced nodes that we that, uh, like 3 nanometer to be specific, where where our socs are, the latest socs are produced on as to what is uh, gating the Q2 Supply.
Tim Cook: It's difficult to estimate demand when you haven't met the demand. So, obviously, we have internal estimates on that, but I don't want to share those. But it's very difficult. And just to be clear, it's the advanced nodes, like 3 nanometer, to be specific, where our SoCs, the latest SoCs, are produced on as to what is gating the Q2 supply. And it's a the-
Great as my follow-up. There was a lot of discussion about supply constraints, and I'm surprised that you guys are constrained on advanced packaging, as you generally get your share at the big foundry. And how long will these supply constraints impact your ability to ship to true demand?
Tim Cook: It's difficult to estimate demand when you haven't met the demand. So, obviously, we have internal estimates on that, but I don't want to share those. But it's very difficult. And just to be clear, it's the advanced nodes, like 3 nanometer, to be specific, where our SoCs, the latest SoCs, are produced on as to what is gating the Q2 supply. And it's a the-
and it's a, the it's a direct result of the
It's, it's difficult to estimate demand when you haven't, uh, met the demand.
And so, uh, we—we've obviously—we have internal estimates on that, but I, I don't—I don't want to share those.
23% growth and, you know, that far out stripping what we had internally estimated and having more limited flexibility in the supply chain, uh, for some period of time. But I, I, I don't want to estimate when supply and demand will balance at this point.
All right, thank you Otis. Operator, could we have the next question, please?
Um, but it's, it's very difficult and just to be clear, it's, uh, the advanced nodes that we, that, uh, like 3 nanometer to be specific, where, where our SoCs are—the latest SoCs are produced on—as to what is, uh, gating the Q2 supply.
The next question will be coming from Aaron rakers. Calling from Wells, Fargo, please go ahead.
Atif Malik: Thank you.
Atif Malik: Thank you.
Tim Cook: It's a direct result of the 23% growth and, you know, that far outstripping what we had internally estimated, and having more limited flexibility in the supply chain, for some period of time. But I don't want to estimate when supply and demand will balance at this point.
Tim Cook: It's a direct result of the 23% growth and, you know, that far outstripping what we had internally estimated, and having more limited flexibility in the supply chain, for some period of time. But I don't want to estimate when supply and demand will balance at this point.
And it's a, the—it's a direct result of the
23% growth and, you know, that far outstripping what we had internally estimated and having more limited flexibility in the supply chain, uh, for some period of time. But I, I, I don't want to estimate when supply and demand will balance at this point.
Atif Malik: Very helpful. Thanks.
Atif Malik: Very helpful. Thanks.
[Company Representative] (Apple): All right.
Suhasini Chandramouli: All right.
Tim Cook: Yep.
Tim Cook: Yep.
[Company Representative] (Apple): Thank you, Atif. Operator, could we have the next question, please?
Suhasini Chandramouli: Thank you, Atif. Operator, could we have the next question, please?
Operator: The next question will be coming from Aaron Rakers, calling from Wells Fargo. Please go ahead.
Operator: The next question will be coming from Aaron Rakers, calling from Wells Fargo. Please go ahead.
Very helpful, thanks. Thank you, artist. Operator, could we have the next question, please?
Aaron Rakers: Yeah, thanks for taking the question. I have two as well, and I'll try and stay away from the memory question. I'm curious and, you know, obviously, a lot of focus on the China demand, but I'm curious, you also called out India. And so can you maybe unpack some of the things that you're seeing in the Indian market, you know, as far as iPhone traction? Any kind of color on, you know, what is a very large install base in India that seems to be a good growth opportunity for Apple still?
Aaron Rakers: Yeah, thanks for taking the question. I have two as well, and I'll try and stay away from the memory question. I'm curious and, you know, obviously, a lot of focus on the China demand, but I'm curious, you also called out India. And so can you maybe unpack some of the things that you're seeing in the Indian market, you know, as far as iPhone traction? Any kind of color on, you know, what is a very large install base in India that seems to be a good growth opportunity for Apple still?
The next question will be coming from Aaron Rakers, calling from Wells Fargo. Please go ahead.
Yeah. Thanks for, uh, taking a question. I have 2 as well, um, and I'll try and stay away from the memory question. I'm curious in, you know, obviously a lot of focus on the China demand, but I'm curious you also called out India and so can can you maybe unpack some of the things that you're seeing in the Indian market? Um, you know, as far as iPhone traction any kind of color on? You know, what is a very large install base in India. That seems to be a a good growth opportunity for Apple still. Yeah, thanks for the question. Uh, we did set a quarterly Revenue record, uh, uh, during the December quarter and, uh, to go a little further down. We, we said, uh, quarterly Revenue records on iPhone and mac and iPad and an all-time Revenue record on services. So it was a terrific quarter in India. Uh, we really liked what we see there. It's the second largest smartphone market in the world and the fourth largest PC market. So and we we still have despite uh, uh,
Tim Cook: Yeah, thanks for the question. We did set a quarterly revenue record during the December quarter. And to go a little further down, we set quarterly revenue records on iPhone, Mac, and iPad, and an all-time revenue record on services. So it was a terrific quarter in India. We really like what we see there. It's the second largest smartphone market in the world and the fourth largest PC market. And we still have, despite a very nice growth history, we have modest share there, and so we think there's a huge opportunity for us there. And we could not be more excited about it.
Tim Cook: Yeah, thanks for the question. We did set a quarterly revenue record during the December quarter. And to go a little further down, we set quarterly revenue records on iPhone, Mac, and iPad, and an all-time revenue record on services. So it was a terrific quarter in India. We really like what we see there. It's the second largest smartphone market in the world and the fourth largest PC market. And we still have, despite a very nice growth history, we have modest share there, and so we think there's a huge opportunity for us there. And we could not be more excited about it.
Very nice growth history. We have modest share there and so we think there's a huge opportunity for us there.
And, uh, we could not be more excited about it. If you look at the the other thing that I would point out is the that the majority of customers uh, that are buying iPhone and mac and iPad and watch are all new to that product. And so it, it uh, speaks very well to to opportunity there.
Yeah, Aaron, and I had you mentioned the install base. We're seeing strong double digit growth in the install base in India, as well, which is, which is really encouraging.
Yeah. Thanks for, uh, taking a question. I have 2 as well, um, and I'll try and stay away from the memory question. I'm curious in, you know, obviously a lot of focus on the China demand, but I'm curious you also called out India and so can can you maybe unpack some of the things that you're seeing in the Indian market, um, you know, as far as iPhone traction and any kind of color on, you know, what is a very large install base in India. That seems to be a a good growth opportunity for Apple still. Yeah, thanks for the question. Uh, we did set a quarterly Revenue record, uh, uh, during the December quarter and, uh, to go a little further down. We, we said, uh, quarterly Revenue records on iPhone and mac and iPad and an all-time Revenue record on services. So it was a terrific quarter in India. Uh, we really liked what we see there. It's the second largest smartphone market in the world and the fourth largest PC market. So and we we still have despite uh, uh,
Very nice growth history. We have Mac here there, and so we think there's a huge opportunity for us there.
Tim Cook: If you look at the other thing that I would point out is that the majority of customers that are buying iPhone, Mac, iPad, and Watch are all new to that product, and so it speaks very well to opportunity there.
If you look at the other thing that I would point out is that the majority of customers that are buying iPhone, Mac, iPad, and Watch are all new to that product, and so it speaks very well to opportunity there.
Kevan Parekh: Yeah, and Aaron, I'd add, you mentioned the install base. We're seeing strong double-digit growth in the install base in India as well, which is really encouraging.
Kevan Parekh: Yeah, and Aaron, I'd add, you mentioned the install base. We're seeing strong double-digit growth in the install base in India as well, which is really encouraging.
Yep. And then, as a quick follow-up, you know, kind of tied to memory, maybe not so much. But, you know, part of this, this current generation, you know, iPhone cycle is you, you clearly deepen some of your own internal silicon capabilities on the device. I'm curious if that, if we should think about that as a lever and maybe a, a supportive factor to gross margin that might be underappreciated. And, you know, any thoughts on, you know where we go from here as far as continual opportunities of internalizing, your own silicon. Thank you. Yeah. I'll let Kevin talked about the gross margin but in terms of the product,
Aaron Rakers: Yep. And then as a quick follow-up, you know, kind of tied to memory, maybe not so much, but, you know, part of this current generation iPhone cycle is you clearly deepen some of your own internal silicon capabilities on the device. I'm curious if that if we should think about that as a lever and maybe a supportive factor to gross margin that might be underappreciated, and, you know, any thoughts on, you know, where we go from here as far as continual opportunities of internalizing your own silicon? Thank you.
Aaron Rakers: Yep. And then as a quick follow-up, you know, kind of tied to memory, maybe not so much, but, you know, part of this current generation iPhone cycle is you clearly deepen some of your own internal silicon capabilities on the device. I'm curious if that if we should think about that as a lever and maybe a supportive factor to gross margin that might be underappreciated, and, you know, any thoughts on, you know, where we go from here as far as continual opportunities of internalizing your own silicon? Thank you.
And, uh, we could not be more excited about it. If you look at the the other thing that I would point out is the that the majority of customers uh, that are buying iPhone and mac and iPad and watch are all new to that product. And so it, it, uh, speaks very well to to opportunity there. Yeah, and Aaron, and add you mentioned the install base? We're seeing strong double digit growth in the install base in India, as well, which is, which is really encouraging.
We, we believe it's a game changer and a major competitive advantage.
Tim Cook: Yeah, I'll let Kevan talk about the gross margin, but in terms of the product, which is at the heart of what we think about in the user, Apple Silicon has just been a incredible game changer for us. Starting with iPhone and then on iPad and, of course, the Mac as of a few years ago. So we, we believe it's a game changer and a major competitive advantage.
Tim Cook: Yeah, I'll let Kevan talk about the gross margin, but in terms of the product, which is at the heart of what we think about in the user, Apple Silicon has just been a incredible game changer for us. Starting with iPhone and then on iPad and, of course, the Mac as of a few years ago. So we, we believe it's a game changer and a major competitive advantage.
Go from here as far as continual opportunities of internalizing your own silicon. Thank you. Yeah. I'll let Kevin talk about the gross margin, but in terms of the product,
And as far as impact on gross margin, you know, we have been as, you know, investing in core Technologies like, our own silicon, our own modem. And certainly, while those do provide opportunities for cost savings and and can be reflecting of margins. They also importantly, provide, you know, the differentiation that's really important for our products as well and give us more control over our roadmap. So I think there's a lot of strategic value to it, but also we are seeing, you know, investments in our core Technologies. Impacting. You know, growth margins in a positive way.
Yep. Thank you. Awesome. Thank you Aaron. Operator, could we have our last question, please?
Kevan Parekh: Yeah, and as far as impact on gross margin, yeah, we have been, as you know, investing in core technologies like our own silicon, our own modem. Certainly, while those do provide opportunities for cost savings and can be reflected in margins, they also importantly provide, you know, the differentiation that's really important for our products as well and give us more control over our roadmap. So I think there's a lot of strategic value to it, but also we are seeing, you know, investments in our core technologies impacting, you know, gross margin in a positive way.
Kevan Parekh: Yeah, and as far as impact on gross margin, yeah, we have been, as you know, investing in core technologies like our own silicon, our own modem. Certainly, while those do provide opportunities for cost savings and can be reflected in margins, they also importantly provide, you know, the differentiation that's really important for our products as well and give us more control over our roadmap. So I think there's a lot of strategic value to it, but also we are seeing, you know, investments in our core technologies impacting, you know, gross margin in a positive way.
Which is, uh, at the heart of what we think about in the user. Apple silicon has just been an incredible game changer for us, uh, starting with iPhone and then on iPad, and of course, uh, the Mac as of a few years ago. And so we, we believe it's a game changer and a major competitive advantage.
Most certainly, our last question will be coming from Richard Kramer, calling from arrott research, please go ahead. Uh, thanks very much. I have 2 questions. Um, Tim when you think about how Apple might manage AI, do you see that evolving towards more, Edge, AI, or on-device, Services versus cloud-based Ai? And are you confident? You've reserved sufficient Data Center capacity to support. Uh, uh, the widespread Syria adoption especially given that you're not following the other hyperscalers and sharply, increasing capex.
Aaron Rakers: Yep. Thank you.
Aaron Rakers: Yep. Thank you.
And as far as, um, impact on gross margin, you know, we have been, as you know, investing in core technologies like our own silicon, our own modem. And certainly, while those do provide opportunities for cost savings and can be reflective of margins, they also importantly provide, you know, the differentiation that's really important for our products as well and give us more control over our roadmap. So I think there's a lot of strategic value to it, but also we are seeing, you know, investments in our core technologies impacting, you know, gross margins in a positive way.
[Company Representative] (Apple): Awesome. Thank you, Aaron. Operator, could we have our last question, please?
Suhasini Chandramouli: Awesome. Thank you, Aaron. Operator, could we have our last question, please?
Yep. Thank you. Awesome. Thank you, Aaron, operators. Could we have our last question, please?
Operator: ... Most certainly. Our last question will be coming from Richard Kramer, calling from Arete Research. Please go ahead.
Operator: ... Most certainly. Our last question will be coming from Richard Kramer, calling from Arete Research. Please go ahead.
Richard Kramer: Thanks very much. I have two questions. Tim, when you think about how Apple might manage AI, do you see that evolving towards more edge AI or on-device services versus cloud-based AI? And are you confident you've reserved sufficient data center capacity to support the widespread Siri adoption, especially given that you're not following the other hyperscalers in sharply increasing CapEx?
Richard Kramer: Thanks very much. I have two questions. Tim, when you think about how Apple might manage AI, do you see that evolving towards more edge AI or on-device services versus cloud-based AI? And are you confident you've reserved sufficient data center capacity to support the widespread Siri adoption, especially given that you're not following the other hyperscalers in sharply increasing CapEx?
Uh, the answer is that we see both being important, the on-device and the private Cloud compute. And so we don't see it as an either or we see it as above and uh, you know, and we believe it's a differentiator uh, because of our privacy approach.
Uh, in terms of do we have enough capacity?
Most certainly, our last question will be coming from Richard Kramer, calling from Arrott Research. Please go ahead. Uh, thanks very much. I have two questions. Um, Tim, when you think about how Apple might manage AI, do you see that evolving towards more edge AI or on-device services versus cloud-based AI? And are you confident you've reserved sufficient—
It's hard to estimate with Precision, uh, what the demand will be. Uh, but we've done the, the sort of the best job that we can do and I've, uh, in either have or are putting capacity in for it.
Tim Cook: The answer is that we see both being important, the on-device and the Private Cloud Compute. And so we don't see it as an either/or; we see it as a both. And, you know, and we believe it's a differentiator, because of our privacy approach. In terms of do we have enough capacity, it's hard to estimate with precision, what the demand will be. But we've done the sort of best job that we can do, and we either have or are putting capacity in for it.
Tim Cook: The answer is that we see both being important, the on-device and the Private Cloud Compute. And so we don't see it as an either/or; we see it as a both. And, you know, and we believe it's a differentiator, because of our privacy approach. In terms of do we have enough capacity, it's hard to estimate with precision, what the demand will be. But we've done the sort of best job that we can do, and we either have or are putting capacity in for it.
Data center capacity to support, uh, uh, the widespread Siri adoption, especially given that you're not following the other hyperscalers and sharply increasing CapEx.
Uh, the answer is that we see both being important, the on-device and the private cloud compute. And so we don't see it as an either-or, we see it as a both, and, uh, you know, and we believe it's a differentiator, uh, because of our privacy approach.
Uh, in terms of, do we have enough capacity?
Okay. And and you also you mentioned the 2.5 billion active device number. But Apple intelligence features have only been available since the 15 Pro. So can you speak at all to roughly? What portion of your iPhone or overall? Active device? Install base is now ai capable and has this been a factor in maybe a more gradual, pace of launching, wider AI services
Yeah, Richard, this is Kevin. You know, we don't provide that specific number but it is a growing number is you can imagine in our install base and so we're encouraged by the amount of devices now that are capable. Um but we're not going to provide a specific figure on that today.
It's hard to estimate with precision, uh, what the demand will be. Uh, but we've done the, the sort of the best job that we can do, and I've, uh, and either have or are putting capacity in for it.
Richard Kramer: Okay. And, and you also, you mentioned the 2.5 billion active device number, but Apple Intelligence features have only been available since the 15 Pro. So can you speak at all to roughly what portion of your iPhone or overall active device install base is now AI-capable? And has this been a factor in maybe a more gradual pace of launching wider AI services?
Richard Kramer: Okay. And, and you also, you mentioned the 2.5 billion active device number, but Apple Intelligence features have only been available since the 15 Pro. So can you speak at all to roughly what portion of your iPhone or overall active device install base is now AI-capable? And has this been a factor in maybe a more gradual pace of launching wider AI services?
Okay, well, I had to try. Thank you.
Kevan Parekh: Yeah, Richard, this is Kevan. You know, we don't provide that specific number, but it is a growing number, as you can imagine, in our installed base, and so we're encouraged by the amount of devices now that are capable. But we're not going to provide a specific figure on that today.
Kevan Parekh: Yeah, Richard, this is Kevan. You know, we don't provide that specific number, but it is a growing number, as you can imagine, in our installed base, and so we're encouraged by the amount of devices now that are capable. But we're not going to provide a specific figure on that today.
Okay. And you also mentioned the 2.5 billion active device number. But Apple Intelligence features have only been available since the 15 Pro. So can you speak at all to roughly what portion of your iPhone or overall active device install base is now AI capable, and has this been a factor in maybe a more gradual pace of launching wider AI services?
All right, thank you. Richard a replay of today's call will be available for 2 weeks on Apple podcasts as a webcast on apple.com investor and Via telephone the number for the telephone replay is 8665831035. Please enter a confirmation code, 890-2968, followed, by the pound sign. These replays will be available by approximately 5:00 p.m. Pacific time tonight.
Yeah, Richard, this is Kevin. You know, we don't provide that specific number, but it is a growing number. You can imagine, in our install base, and so we're encouraged by the amount of devices now that are capable. Um, but we're not going to provide a specific figure on that today.
Richard Kramer: Okay. Well, I had to try. Thank you. All right. Thank you, Richard. A replay of today's call will be available for two weeks on Apple Podcasts, as a webcast on apple.com/investor, and via telephone. The number for the telephone replay is 866-583-1035. Please enter confirmation code 8902968, followed by the pound sign. These replays will be available by approximately 5:00 PM Pacific Time tonight. Members of the press with additional questions can contact Josh Rosenstock at 408-862-1142, and financial analysts can contact me, Suhasini Chandramouli, with additional questions at 408-974-3123. Thanks again for joining us today.
Richard Kramer: Okay. Well, I had to try. Thank you.
Suhasini Chandramouli: All right. Thank you, Richard. A replay of today's call will be available for two weeks on Apple Podcasts, as a webcast on apple.com/investor, and via telephone. The number for the telephone replay is 866-583-1035. Please enter confirmation code 8902968, followed by the pound sign. These replays will be available by approximately 5:00 PM Pacific Time tonight. Members of the press with additional questions can contact Josh Rosenstock at 408-862-1142, and financial analysts can contact me, Suhasini Chandramouli, with additional questions at 408-974-3123. Thanks again for joining us today.
Okay, well, I had to try. Thank you.
All right, thank you, Richard.
Members of the press with additional questions can contact. Josh rosenstock at 408-862-1142 and financial analysts can contact me suhasi. Chandra Molly with additional questions at 408-974-3123. Thanks again for joining us today.
Once again, this does conclude today's conference, we do appreciate your participation.
C, as a webcast on apple.com/investor, and via telephone. The number for the telephone replay is 866-583-1035. Please enter confirmation code 890-2968, followed by the pound sign. These replays will be available by approximately 5:00 p.m. Pacific Time tonight.
Members of the press with additional questions can contact Josh Rosenstock at (408) 862-1142, and financial analysts can contact me, Suhasini Chandramouli, with additional questions at (408) 974-3123. Thanks again for joining us today.
Operator: Once again, this does conclude today's conference. We do appreciate your participation.
Operator: Once again, this does conclude today's conference. We do appreciate your participation.
Once again, this does conclude today's conference. We do appreciate your participation.
