Apple’s iPhone boom, China rebound defy expectations, but effect of 25% India tariff unknown

Apple just posted a strong June quarter, thanks to a boom in iPhone sales that hit $44.5 billion, and a surprising rebound in China.

The tech giant's iPhone revenue, up 13.2%, beats analysts’ forecasts of $40 billion and tops last year’s $39.3 billion. 

Total revenue jumped 10% year-over-year to $94 billion.

Apple also set a new June quarter iPhone sales record, with 13% year-over-year growth. 

The iPhone remains its top revenue source.

Apple’s China sales also ticked up — from $14.7 billion to $15.3 billion — reversing earlier declines. 

It was the first growth in the region in two years. Apple shares rose over 2% in after-hours trading.

The long-term effects of a 25% tariff Trump slapped India, which now makes the bulk of iPhones sold in the US, remains unknown.

For now, CEO Tim Cook is celebrating, crediting the iPhone for Apple’s strong showing.

“It’s difficult to see a world where iPhone’s not living in it,” he said. “And that doesn’t mean that we are not thinking about other things as well, but I think that the devices are likely to be complementary devices, not a substitution.” 

He was responding to a question about how Apple is preparing for a scenario in which people rely more on voice assistants and less on screens.

He insisted the iPhone would remain central to Apple — even in the age of AI. Cook said AI will complement, not replace, Apple devices.

Still, the AI race is heating up.

Microsoft and Meta stocks recently surged 7% and 9%, fuelled by AI-related momentum. 

Meanwhile, Apple stock has dropped nearly 15% this year, missing the broader tech rally.

Apple expects $1.1 billion in tariff costs next quarter, up from $800 million. To dodge some of that, Apple moved most US iPhone production from China to India.

Now, “the vast majority” of iPhones sold in the US are made in India, though up to 90% of iPhones are still made in China.

Cook also pointed to Apple’s investments in the US. 

Around 19 billion chips have been made domestically.

In AI, Apple admits it’s behind.

A major Siri upgrade has been delayed to 2026, as Apple tries to catch up with ChatGPT and Google Gemini.

Cook acknowledged the talent race, noting Apple has lost some AI researchers to Meta. 

But he remains confident:

“We have a great, great team, and we're putting all of our energy behind it,” he told US media.

Apple has acquired seven companies this year — some focused on AI. It’s also reallocating internal teams to boost development.

The return to growth in China is crucial. Apple had been under pressure from Huawei and other local brands. Analysts say recent gains were helped by government subsidies and promotional pricing.

The iPhone 16 drove upgrades, helping push China iPhone sales up 8% year-over-year in Q2.

Despite the upbeat results, questions remain about Apple’s future.

Given the new US tariffs kicking in this month, particularly the 25% tariffs on India and 30% on China, two countries where its top-selling iPhones are made, the question looms: how can Apple sustain the momentum without a hit on revenue or sales?

Some analysts, including Ted Mortonson of Baird, are skeptical about Cook’s leadership in a world shifting fast toward AI.

“Apple needs a tech visionary,” he told CNN.