What it does
Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, alongside related services. Its device families are built around its own operating systems: iPhone uses iOS, Mac uses macOS and iPad uses iPadOS. Wearables include smartwatches, wireless headphones and spatial computers; its home range includes a streaming and gaming device and smart speakers.
Its services span advertising; AppleCare support and coverage; cloud services that keep content available across Apple devices and Windows personal computers; digital-content platforms and subscriptions; and payment services. The App Store lets customers discover and download applications and digital content, while subscription offerings include games, fitness, music, news, video and live sports.
Apple sells to consumers, small and mid-sized businesses, education customers, enterprises and governments. It reaches them through its retail and online stores, direct sales force, service platforms, cellular-network carriers and other resellers. The company manages the business geographically across the Americas, Europe, Greater China, Japan and Rest of Asia Pacific.
Apple was founded in 1976 and is headquartered in Cupertino. Tim Cook is Chief Executive Officer. As of September 27, 2025, Apple had approximately 166,000 full-time equivalent employees.
How it makes money
Apple earns product revenue when it sells hardware and accessories, and service revenue from advertising, support plans, cloud offerings, digital-content platforms and subscriptions, and payment services. It sells products directly and through indirect channels, while services are sold through service platforms. Direct channels represented 40% of total net sales during 2025 and indirect channels represented 60%.
The business is managed by geography rather than by separate product operating segments. The five reportable segments offer similar hardware, software and services but are managed separately to align with customers, distribution partners and local market conditions.
In FY2025, iPhone revenue was $209.6 billion and Services revenue was $109.2 billion; in Q3, iPhone revenue was $54.3 billion and Mac revenue was $10.4 billion. iPhone represented 50.4% of FY2025 revenue and Services represented 26.2%. Mac revenue was $33.7 billion, iPad revenue was $28.0 billion, and Wearables, Home and Accessories revenue was $35.7 billion.
Within Services, recurring or repeatable revenue can arise from subscriptions, cloud storage, AppleCare plans, advertising, transactions and distribution of third-party applications and content. Management said on the Q3 2026 earnings call that paid subscriptions had surpassed one and a half billion. Management also said on the call that it raised prices on iPad and Mac because of memory-price inflation. The company is testing an upgrade program in its retail stores that uses leasing plans to help customers obtain newer products.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| iPhone | $209.6 billion | 50.4% | 4.18% |
| Services | $109.2 billion | 26.2% | 13.5% |
| Wearables, Home and Accessories | $35.7 billion | 8.58% | −3.56% |
| Mac | $33.7 billion | 8.10% | 12.4% |
| iPad | $28.0 billion | 6.73% | 4.98% |
Customers and how it sells
Apple’s customers are primarily consumers, small and mid-sized businesses, education institutions, enterprises and governments. It sells directly through retail and online stores and a direct sales force, and indirectly through cellular-network carriers and other resellers. Both routes sell products; service platforms sell services in the same markets.
The Americas was Apple’s largest reportable segment in FY2025, with revenue of $178.4 billion and a 42.9% share. Europe produced $111.0 billion, or 26.7%; Greater China produced $64.4 billion, or 15.5%; Japan produced $28.7 billion, or 6.90%; and Rest of Asia Pacific produced $33.7 billion, or 8.10%. The U.S. accounted for $151.8 billion, or 36.5%, of FY2025 revenue. Other countries accounted for $200.0 billion, or 48.1%.
Revenue rose in the Americas, Europe, Japan and Rest of Asia Pacific during FY2025, while Greater China revenue declined, primarily because of lower iPhone sales. Europe includes European countries, India, the Middle East and Africa. Greater China includes China mainland, Hong Kong and Taiwan. Management said on the Q3 2026 earnings call that Apple had received approval to ship initial Apple Intelligence features in China and was working through the rollout.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Other countries | $200.0 billion | 48.1% | 9.96% |
| U.S. | $151.8 billion | 36.5% | 6.75% |
| China | $64.4 billion | 15.5% | −3.85% |
Suppliers and costs
Apple relies on outsourcing partners for a significant majority of manufacturing and on partners primarily in Asia for final assembly of substantially all hardware products. Manufacturing is performed in whole or in part by partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, with sourcing also from U.S. partners and facilities. It has also outsourced much of transportation and logistics management.
Most essential components are available from multiple sources, but certain components come from single or limited sources. Apple uses custom components, and new products can use components available from only one source. It competes with other device makers for components, and shortages and commodity-price changes can affect availability and cost.
Management said on the Q3 2026 earnings call that supply constraints were primarily tied to availability of advanced nodes used for its system-on-chip production, and that strong iPhone and Mac demand exceeded expectations. It also said memory pricing was increasing and that the DRAM market primarily has three suppliers. Apple had $56.2 billion of manufacturing purchase obligations as of September 27, 2025, including $55.4 billion payable within 12 months.
- Revenue$416.2B
- Cost of revenue−$221.0B
- Research and development−$34.6B
- Selling, general and administrative−$27.6B
- Operating income$133.1B
Competitive position
Apple competes in global markets for smartphones, personal computers, tablets, wearables, accessories and services. These markets have aggressive price competition, pressure on gross margins, frequent product introductions, short product cycles, evolving standards and rapid technological change. Apple states that it has a minority share of the global smartphone, personal computer, tablet and wearables markets.
The company identifies price, product and service features including security, price and performance, quality and reliability, design and technology innovation, third-party software and accessories, marketing and distribution, service and support, reputation, and intellectual-property protection as competitive factors. It designs and develops nearly the entire solution for its products, including hardware, operating system, numerous software applications and related services.
Developer support also matters to the product proposition. Apple identifies Android for smartphones and tablets, Windows for personal computers and tablets, and PlayStation, Nintendo and Xbox for gaming platforms as competing platforms for developer attention. No competitor companies are identified in the available business and risk descriptions.
Our reading: Apple’s hardware-software-services integration is a meaningful moat source because the company develops nearly the entire solution, but competitors can offer integrated solutions and imitate product features. [item1; item1a]
Our reading: Its third-party software and accessories ecosystem is a meaningful moat source because software availability can influence hardware purchases, but developer support depends on the relative benefits of Apple’s platforms. [item1; item1a]
Our reading: Intellectual property, retail and distribution, service and support are supporting moat sources, while price competition, lower-cost competitors and minority global market shares limit their protection. [item1; item1a]
Growth opportunities
Apple’s stated opportunity set spans smartphones, personal computers, tablets, wearables, accessories and services. FY2025 product trends differed by category: iPhone revenue grew to $209.6 billion, Services grew to $109.2 billion, Mac grew to $33.7 billion and iPad grew to $28.0 billion, while Wearables, Home and Accessories declined to $35.7 billion. Services growth was primarily driven by advertising, the App Store and cloud services.
Management said on the Q3 2026 earnings call that cloud services, video, payment services and advertising each had strong double-digit growth in the June quarter, and that Apple set all-time records in cloud services and payment services. Management also said Apple Pay had a record level of users in developed and emerging markets. The company plans to offer iCloud Plus upgrade options for customers who use its AI services heavily.
Management said on the Q3 2026 earnings call that Apple saw enormous opportunities in AI and described the ability to run some requests on device as strategic. It also said it sourced over 100 million components from Arizona during the year. Management said on the Q2 2026 earnings call that Apple had launched Apple Business, combining hardware, software and enterprise services for company deployments, and planned Apple Maps search and discovery advertising in the U.S. and Canada. The company does not state a market-size target in the available materials.
- $365.8BFY2021
- $394.3BFY2022
- $383.3BFY2023
- $391.0BFY2024
- $416.2BFY2025
Structural risks
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Global demand and disruption. Apple’s performance depends significantly on global and regional economic conditions. Inflation, interest rates, currency movements and weaker consumer confidence can reduce demand, while political events, conflict, disasters, public-health issues and cyberattacks can interrupt operations and distribution.
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Trade and supply-chain exposure. A significant majority of manufacturing is performed by outsourcing partners, principally across China mainland, India, Japan, South Korea, Taiwan and Vietnam. Tariffs, trade controls and retaliation can increase costs, limit components or products, require supply-chain changes and affect demand.
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Single and limited sources. Apple depends on single-source or limited-source partners for many components and manufacturing activities. Custom components and new technologies can have capacity constraints, while shortages and commodity-price swings can raise costs or limit supply.
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Competition and product transitions. The company operates in markets with price pressure, short product cycles and rapid change. It must introduce and transition products, services and technologies successfully, while protecting intellectual property and sustaining developer support.
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Quality, services and AI. Hardware, software and services can have defects, outages, slowdowns, errors and security vulnerabilities. Apple states that artificial-intelligence features can add risks, including harmful or inaccurate content and experiences.
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Memory costs and near-term availability. Management said on the Q3 2026 earnings call that it expected supply constraints to increase significantly sequentially and affect iPhone, Mac and iPad, while memory market pricing could have an increasing effect on the business beyond September.
Bottom line
Our reading
Our reading: Apple is an integrated consumer-device and services business whose revenue remains led by iPhone, with Services providing a large second revenue stream and direct plus partner distribution extending its reach. [item1; product.iphone.fy2025; product.services.fy2025]
Our reading: The business rests on product cycles, a connected hardware-software-services model and developer support, while its exposure includes outsourced manufacturing, limited-source components, trade measures, memory costs and intense price competition. [item1; item1a; call_qa]
Our reading: Geographic breadth is substantial, but FY2025 revenue declined in Greater China and Apple states that it holds minority shares in several global device markets. [item7; item1a]