How long can Apple keep relying on the iPhone? Nobody knows, because there’s never been another product quite like it. But the plumpest golden goose in history isn’t going to keep laying eggs forever.
Apple, to its credit, is fully aware of this. With its enthusiastic hyping of the latest cautious iPhone update, the company might occasionally sound faintly deluded: a little like the man in the old joke who falls out of a building and says to the people on each floor as he passes, “Everything’s fine so far!” But Apple is doing its best to find a cushion to land on.
In the company’s latest financial results, we got an idea of how the cushion hunt is going, and the answer is “pretty well.” Tim Cook named Q1 2025 as Apple’s best quarter ever, with record revenue of $124.3 billion despite a small year-on-year dip in the iPhone’s fortunes. Who needs the iPhone when you have consistent growth in services to make up for any shortfalls?
It’s certainly gratifying for the company to record its highest-ever quarterly revenue after launching one of its most boring iPhones (which didn’t even have its flagship feature at launch). But there are concerns we should discuss before we break out the champagne.
One is that regardless of growth in other areas, the iPhone remains Apple’s most important product by an unhealthy margin. That burgeoning Services division, a portmanteau category combining various tenuously related revenue streams, brought in a total of $26.3 billion, compared to the iPhone’s $69.1 billion. Wearables, Home, and Accessories brought in a combined $11.7 billion, the iPad just $8.1 billion, and Macs $7.8 billion. In first place, there’s the iPhone. In second place is daylight. And only then do we get to the other products.
In that light, it becomes a little clearer that simply growing services isn’t the straightforward solution to the iPhone’s eventual decline that it might sound like. This quarter, solid growth in services and iPads was just about enough to make up for a tiny drop for the iPhone. We’re still at a point where if the iPhone sneezes, Apple catches a cold. This wasn’t a sneeze. It was barely the first “Aaahh…”
At some point, the iPhone will suffer a real setback, and we don’t yet know how Apple will handle that. Last week, research found that buyers of premium iPhones are becoming less inclined to pay extra for more storage, which could become a headache if it turns into a long-term trend. Apple has historically made a lot of money from iPhone storage upgrades, but with the rise of music streaming and cloud photo storage, there doesn’t seem to be quite the same demand.
For a company of Apple’s size, it isn’t easy to pivot, and it should be applauded for trying its best to do so. By building a mixed-reality headset and an AI platform Apple has positioned itself for two possible post-smartphone futures, and by growing Apple TV+ and its other subscription services it has shored up revenues in the short to medium term. These are all positive steps. But the pivot hasn’t yet been tested. Dip or not, this was another epic quarter from the iPhone, and we don’t yet know what will happen when the good times finally come to an end.
Foundry
Welcome to our weekly Apple Breakfast column, which includes all the Apple news you missed last week in a handy bite-sized roundup. We call it Apple Breakfast because we think it goes great with a Monday morning cup of coffee or tea, but it’s cool if you want to give it a read during lunch or dinner hours too.
Trending: Top stories
DeepSeek is making everyone look silly except Apple, reckons the Macalope.
Have you restarted your MacBook this week? You should, pleads Michael Simon.
Stephan Wiesend explains why your VPN isn’t as secure as you think.
Your next iPhone and Mac might cost a whole lot more thanks to political factors.
Apple’s push into the smart home is a decade late but right on time.
Apple should smarten up the HomePod mini 2 with these 5 upgrades.
This MacBook Pro was too busted for even AppleCare+ to repair!
Apple honors Black History Month with color-morphing Apple Watch band.
Podcast of the week
Apple released an update to iOS, so what should you expect? In the latest episode of the Macworld podcast we take a look at what’s in iOS 18.3, plus talk about the latest Apple news.
You can catch every episode of the Macworld Podcast on Spotify, Soundcloud, the Podcasts app, or our own site.
Reviews corner
- Mullvad review: A VPN that’s all about privacy.
- Mac Backup Guru review: A utility worth looking into.
- LaCie Rugged SSD Pro5 review: Blazing back-up performance.
The rumor mill
New leak gives us a clear look at the iPhone SE 4–with a notch. It seems rumors of a Dynamic Island were mistaken.
Software updates, bugs, and problems
SLAP and FLOP browser vulnerabilities threaten nearly every Apple device since 2021.
Whoops! Apple accidentally breaks watchOS updates on older devices.
The latest iPhone update patches a security flaw exploited since 2023.
We round up 5 small (but still kinda big) changes coming to your iPhone in iOS 18.3.
On which subject, some iPhone users will soon get a ‘secret addition’ after upgrading to iOS 18.3.
The latest iPhone update patches a security flaw exploited since 2023.
And with that, we’re done for this week’s Apple Breakfast. If you’d like to get regular roundups, sign up for our newsletters. You can also follow us on Facebook, Threads, or Twitter for discussion of breaking Apple news stories. See you next Monday, and stay Appley.
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