--- title: "Apple's Q4 2024 (Apple's fiscal year Q1 2025) earnings report analysis—iPhone tops the charts, but future growth depends on AI?" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/26925243.md" description: "Two days ago, $Apple(AAPL.US) released its quarterly earnings report. Except for the decline in iPhone and wearable revenue, other areas showed growth. Total revenue increased by 4%, net profit rose by 7%, and the stock price surged after hours, indicating that the market seems quite satisfied with Apple's earnings report. Key financial data is shown in the figure below: Here’s my personal take: 1. Although the iPhone ranked first globally and in China, both sales and revenue declined. The smartphone market is highly competitive, with Apple facing intense competition from Android. While Apple's ecosystem is unmatched, domestic subsidies and foldable screens are posing challenges..." datetime: "2025-02-02T08:35:02.000Z" locales: - [en](https://longbridge.com/en/topics/26925243.md) - [zh-CN](https://longbridge.com/zh-CN/topics/26925243.md) - [zh-HK](https://longbridge.com/zh-HK/topics/26925243.md) author: "[投资之路](https://longbridge.com/en/profiles/1262897.md)" --- # Apple's Q4 2024 (Apple's fiscal year Q1 2025) earnings report analysis—iPhone tops the charts, but future growth depends on AI? Two days ago, $Apple(AAPL.US) released its quarterly earnings report. Except for the decline in iPhone and wearable revenue, other segments showed growth. Total revenue increased by 4%, net profit rose by 7%, and the stock price surged after hours, indicating that the market seems relatively satisfied with Apple's earnings. Key earnings data are shown below: Let me share my personal views directly: 1\. Although the iPhone ranks first globally and in China, both sales and revenue have declined. The smartphone market is highly competitive, with Apple under siege from Android. While Apple's ecosystem is unmatched, factors like domestic subsidies, foldable screens, and the rise of high-end Android phones have led to sluggish iPhone growth, as evidenced by Apple's sales over the past few years. 2\. Apple hasn't changed much in the past two years. Its moat is deep, making profits easy. With ample cash reserves, it can fully invest in R&D, coupled with massive buybacks and cancellations, and the bull market in U.S. stocks. Even though Apple's growth has been below 10% or even negative for over ten consecutive quarters, its stock price has remained resilient. However, Apple has yet to find its second growth curve, and its AI journey is still exploratory. Apple has tried many approaches, with VR/MR initially seen as the hoped-for second growth curve, but it's still too early, and current revenue falls far short. The car project has been abandoned, leaving only AI, which is undoubtedly the future. But until Apple's AI ambitions succeed, high growth is unlikely. In the AI era, how Apple seizes opportunities will be crucial for its future. 3\. Regarding Apple's stock price, given its current growth rate and the lack of significant growth in new businesses for the foreseeable future, the current valuation of nearly 40x doesn't seem cheap. From an investment perspective, the odds aren't great. The iPhone is already the top or second-best globally, leaving little room for major growth. VR and AI show no signs of becoming the second growth curve anytime soon. Investment looks to the future, and in 2025 or 2026, Apple's growth will likely remain lackluster. Of course, investment and whether a company is good are separate issues. Apple is undoubtedly one of the world's best companies, but we must consider the price when buying its stock! Apple's business is straightforward, and most people understand it well. My views on Apple remain unchanged; you can refer to my previous earnings analyses. ### **I. Overall Financial Data** Apple's main business is divided into five segments: four hardware categories (iPhone, Mac, iPad, wearables & other hardware) and software services. **Revenue:** This quarter, Apple's total revenue was $124.3 billion, down 4% YoY. The four hardware businesses (iPhone and MR products) declined, while iPad and Mac grew. Software services hit another record high, growing 14%. The chart below clearly shows that over the past five years, Apple's revenue growth exceeded 20% in only four quarters, while the rest were below 10% or negative. Yet Apple's stock has risen about 5x in five years, proving that low growth isn't new—it's been consistent. Without a second growth curve, Apple isn't a high-growth company. There's hardly any company with quarterly revenue of $100 billion and net profit of $30+ billion that can grow 20%+ every quarter. Apple's core investment value lies in its ecosystem, which makes its business model easy and profitable. iPhone revenue was $69.138 billion, down 0.8% YoY, accounting for 55.6% of total revenue. The decline was mainly due to lower average selling prices. In Q4, Apple overtook Samsung to become the global leader in smartphones, but revenue still fell. 2.**Net Profit:** Apple's net profit this quarter was $36.3 billion, up 7% YoY, driven by high-margin software services. 3.**Gross Margin:** Apple's gross profit was $583.8 billion, up 6.3% YoY, with a gross margin of 46.9%, rising both YoY and QoQ. ### **II. iPhone Business Performance—Back to No. 1 Globally** In terms of smartphone shipments, the chart below (Canalys data) shows Apple unexpectedly reclaiming the top global spot in Q4, despite declining shipments. In China, Apple also regained the top spot, but shipments plummeted 25%, with a narrow lead over Android. Domestic subsidies and the rise of foldables mean Apple may retain its ranking but struggle to maintain sales volume. As mentioned earlier, Apple's smartphone business is now about defending its position, leaving little room for imagination. Looking at iPhone revenue, this quarter's iPhone revenue was $69.138 billion, down 0.8% YoY, with an 11% drop in China.. Apple's quarterly iPhone revenue: ### **III. iPad, Mac, and Wearables Revenue** **1.iPad:** iPad revenue this quarter was $8.1 billion, up 15.5% YoY, showing strong recent recovery. **2.Mac:** Mac revenue was $9 billion, up 15.2% YoY, the highest growth in two years. **3.Wearables:** Wearables and other hardware revenue was $11.7 billion, down 2.1% YoY. This is Apple's second-largest hardware revenue stream after the iPhone. VR/MR products could become Apple's second growth curve, but this quarter's MR revenue was negligible. The $3,500 Vision Pro is expected to sell only 400,000 units in 2024, generating just $1.4 billion—far from being the "hope of the village." Growth here will take at least two more years. ### **IV. Software Services: Revenue Hits Another Record** Software services revenue this quarter was $24.213 billion, up 14.1% YoY, another record high, with a gross margin of 74%. This segment is increasingly profitable and a cornerstone of Apple's ecosystem and moat. For historical earnings analyses and data, see my previous reports: [Apple Q2 2024 (Apple FY Q3) Earnings Analysis—Growth Lacking, Margins Make Up](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) [Apple Q1 2024 (Apple FY Q2) Earnings Analysis—Apple Needs to Embrace AI](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) [Apple Q4 2023 (Apple FY Q1) Earnings Analysis—Good Companies Still Need Valuation](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) [Apple Q3 2023 (Apple FY Q4) Earnings Analysis—Revenue Down for Four Straight Quarters, But Not That Bad](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) [Apple Q2 2023 (Apple FY Q3) Earnings Analysis—Apple's Investment Logic Lies in Certainty, Not Growth](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) [Apple Q1 2023 (Apple FY Q2) Earnings Analysis—High Win Rate, But Not High Odds](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) [Apple Q4 2022 (Apple FY Q1) Earnings Analysis](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) [Apple Q3 2022 (Apple FY Q4) Earnings Analysis](https://mp.weixin.qq.com/s?__biz=MzkxODQyMjQ0NA==&mid=2247486257&idx=1&sn=80642a69d1677bf63a04faa5e16aae68&scene=21#wechat_redirect) $GraniteShares 2x Long AAPL Daily ETF(AAPB.US)   Apple earnings data summary: ### Related Stocks - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [AAPB.US](https://longbridge.com/en/quote/AAPB.US.md) ## Comments (1) - **BillChen2377 · 2025-02-02T15:55:13.000Z**: Don't forget Alibaba is still doing buybacks.