Apple's Q3 Earnings Call: Cook on 3 Billionth iPhone, AI Strategy, and Tariff Impact

Following Apple's record-setting third-quarter earnings, CEO Tim Cook and CFO Kevan Parekh held a call with investors, offering key insights into the company's performance and strategy. "Today Apple is proud to report a June quarter revenue record," Cook said, kicking off a discussion that covered the strength of the iPhone, a major push into AI, and the growing impact of U.S. tariffs.

The iPhone's performance was a clear highlight, with revenue growing a "strong 13 percent year over year," according to Cook. He noted this was driven by a record number of upgraders and robust demand for the iPhone 16 family. The quarter also marked a significant milestone, with Cook revealing that Apple had recently shipped its 3 billionth iPhone since the device first launched in 2007.

Artificial Intelligence was a central theme of the discussion. Cook called AI "one of the most profound technologies of our lifetime" and confirmed that Apple is "significantly growing" its investment in the field. He pointed to the on-device models and Private Cloud Compute architecture at the core of Apple Intelligence as key to the company's strategy of delivering features that are "deeply personal, private, and seamlessly integrated."


This approach was a major focus at WWDC 2025, which introduced the new 'Liquid Glass' design language and a year-based naming system with iOS 26 and macOS Tahoe 26. Cook also reiterated that more personalized Siri features are still on track for release next year, following a recently reported delay.

The conversation also turned to the complex issue of U.S. tariffs. CFO Kevan Parekh disclosed that Apple "incurred approximately $800 million of tariff-related costs" in the just-ended quarter. For the upcoming September quarter, that figure is expected to climb to $1.1 billion, assuming "the current global tariff rates, policies, and applications do not change for the balance of the quarter and no new tariffs are added."

This comes as Apple continues to ramp up its manufacturing in India, a strategy backed by a recent $1.5 billion investment from Foxconn to navigate the threat of new tariffs.

Mac revenue saw a nearly 15 percent increase, a result Cook attributed largely to the launch of the new M4 MacBook Air. The Services division also hit a new all-time revenue record of $27.4 billion. Cook noted strong momentum in customer engagement, with both transacting and paid accounts reaching new highs and over 1 billion paid subscriptions across Apple's platforms.
While iPad and Wearables revenue saw declines, Parekh explained this was largely due to difficult year-over-year comparisons against major product launches in the prior year.


Looking ahead, CFO Kevan Parekh offered guidance for the fourth fiscal quarter, projecting mid-to-high single-digit revenue growth. Apple's board also signed off on an additional $100 billion for share repurchases, signaling confidence in the company's financial footing.

You can listen to the full earnings call at apple.com/investor/earnings-call. The webcast will be available for replay for approximately two weeks.

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