Apple(US:AAPL) PYMNTS.com·2025-07-31 23:58Financial Performance - Apple reported record Q3 revenue of $94 billion, up 9.6% from $85.8 billion a year ago, and EPS of $1.57, exceeding analyst expectations of $1.43 per share [13] - Net income for the quarter was $23.4 billion, compared to $21.4 billion in the same period last year [13] - iPhone revenues rose by 13% to $44.6 billion, driven by upgrades to iPhone 16, with significant growth in Europe, Greater China, and Asia-Pacific [14] - Mac revenues increased by 15% to $8 billion, while iPad sales fell by 8% to $6.6 billion [14] - Services revenue grew by 13% to $27.4 billion, while the wearables, home, and accessories category, including Apple Watch, declined by 9% to $7.4 billion [14] Tariff Impact - Apple incurred $800 million in tariff-related expenses in Q3 and anticipates $1.1 billion in Q4, primarily due to IEEPA-related sanctions and Section 232 coverage [7][8] - The increase in tariff costs is attributed to higher sales volumes rather than changes in tariff policy [8] - The majority of Apple's products sold in the U.S. are manufactured in India and Vietnam, while China remains the primary source for products sold outside the U.S. [9] AI Investments and Strategy - Apple is significantly increasing its investments in artificial intelligence (AI), reallocating staff to enhance AI capabilities, particularly in Siri, with new features expected by 2026 [2][4] - The company is open to mergers and acquisitions to accelerate its AI roadmap, having acquired seven companies this year, mostly smaller firms [5][6] - Apple has earmarked $500 billion for investments in the U.S. over four years, including opening semiconductor manufacturing plants [6] Future Outlook - CEO Tim Cook expressed confidence that the iPhone will continue to be relevant in the AI era, complementing other devices rather than being replaced [10] - Apple is preparing to ship Vision OS 26 for the Apple Vision Pro AR headset and is reportedly planning to develop smart glasses [12]