Apple Faces Mixed Results in 2025 Amid Falling iPhone Sales and China Challenges
Josh Gilbert, Market Analyst at eToro
Dubai: Gulf Tech News
Apple Inc. (NASDAQ: AAPL) reported a mixed performance for the first quarter of 2025, as record-breaking revenue was overshadowed by disappointing iPhone sales and a significant drop in revenue from China. The tech giant announced record quarterly revenue, bolstered by its thriving services sector, but concerns over iPhone demand and competition in China remain a challenge.
In the quarter, Apple’s revenue from Greater China dropped by 11% to USD 18.5 billion, well below analysts’ expectations of USD 21.6 billion. This decline has raised further concerns among investors that Apple continues to face hurdles in one of its most critical markets. Despite their efforts, Apple has yet to provide a clear turnaround plan for China, where intensifying competition is eating into market share.
Apple’s much-anticipated AI platform, Apple Intelligence, also fell short of expectations. Market analysts hoped the platform would reignite iPhone demand, but it has not delivered the level of impact necessary to make a meaningful difference. Despite the launch, Apple remains behind its competitors in the AI race, with consumers gravitating toward more advanced AI offerings from rival tech companies.
Amidst the challenges, Apple’s services division was a bright spot. The company reported record services revenue of USD 26.3 billion, a 14% increase year-over-year. This growth was driven by in-app purchases via the App Store, alongside significant contributions from iCloud and Apple Music. Apple’s services business continues to grow rapidly, maintaining high margins and reinforcing its value to the overall portfolio. Additionally, both iPad and Mac sales showed year-over-year growth, providing further positive indicators for investors.
Despite these high points, Apple’s flagship product, the iPhone, continues to face headwinds. Sales fell below estimates, reflecting weaker-than-expected demand for the latest models, even with the integration of Apple Intelligence features. Tim Cook, CEO, and his team now face mounting pressure to deliver a stronger 2025 performance, especially as they work to revive iPhone sales and regain traction in the highly competitive Chinese market.
Looking ahead, Apple’s optimistic revenue forecast for the second quarter provides some reassurance, suggesting that the company is positioning itself for a rebound in the months to come. However, investors will remain watchful for signs of a broader turnaround.
Josh Gilbert, Market Analyst at eToro, noted, “While Apple’s services revenue continues to outperform expectations, it’s clear that the company faces challenges with its core iPhone business. With heightened competition in China and underwhelming results from its AI platform, Apple’s leadership has its work cut out for 2025.”
Notes to editors
The tables compare data from the eToro platform on the final day of 2024 with the final day of 2023. The data refers to funded accounts of eToro users in the UAE.
The data in the first table shows the 10 stocks which have seen the biggest proportional increase and decrease in holders on the eToro platform among UAE users year-on-year (2024 vs 2023). The data in the second table shows the top 10 most held stocks positions (open positions) by UAE investors on the eToro platform at the end of 2024. As the vast majority of stocks traded on eToro are the real asset, this data does not include positions held as CFDs.
All data accurate as of after market close on Tuesday 31st December 2024.
