Apple earnings show record revenue despite slowing iPhone growth

Core Insights - Apple narrowly surpassed Wall Street's revenue estimates for Q4, driven by an expanding services business, with total revenue rising 8% year-over-year to $102.5 billion, just above the consensus of $102.1 billion [1] - The company achieved a market capitalization of $4 trillion, becoming the third company in history to do so, following Nvidia and Microsoft [1] Financial Performance - Diluted earnings per share (EPS) reached $1.85, exceeding the consensus estimate of $1.77, while gross margin for the quarter was $48.3 billion, beating the forecast of $47.4 billion despite an estimated $1.1 billion tariff hit [2] - iPhone product revenue increased 6% year-over-year to $49 billion, marking a fourth-quarter record, although it narrowly missed the consensus estimate of $49.3 billion [3] - Overall product revenue was $73.7 billion, up 5% year-over-year, slightly exceeding the consensus estimate of $73.5 billion [4] - Services revenue reached $28.8 billion, a 15% year-over-year increase, surpassing the consensus estimate of $28.2 billion, and bringing annual revenues for the services division to $109.2 billion, exceeding $100 billion for the first time [5] Market Dynamics - Greater China revenue was a weak point, coming in at $14.5 billion, down about 4% year-over-year and significantly below expectations of around $16.4 billion, indicating tougher competition from domestic Android flagships and pressure on high-end iPhone demand [4] - The services segment, which includes Apple Music, iCloud, and the App Store, has doubled in size over the past five years and is projected to account for a quarter of Apple's revenue and up to 50% of its profit, highlighting its importance as a growth driver as iPhone sales stabilize [6] Strategic Insights - The results emphasize that technology beyond AI can generate returns, with "sticky" products providing stability and acting as a hedge against reliance on innovation [7]