iPhone in Focus: Apple Intelligence and Revenue Trends from Q1 2025 Results

Apple Intelligence Isn't Significantly Boosting iPhone Sales

The US is currently the world's most representative market offering Apple Intelligence. Meanwhile, 
Japan, which hasn't yet rolled out Apple Intelligence, provides a contrast.

Assuming a similar product mix across regions and ignoring differences in exchange rates and local 
pricing, revenue share should approximate shipment share. In addition, assume the US represents about 75% of all sales and shipments in the Americas. Although these assumptions aren't exact, they are 
adequate for trend analysis.

Based on Apple's January 30 earnings report:

• US share of global iPhone shipments: 31.8% in 4Q24 vs 31.7% in 4Q23
• Japan's share: 7.2% in Q4'24 vs 6.5% in Q4'23

My latest industry research shows that global iPhone 16 shipments reached ~66M units in 4Q24, 
compared to iPhone 15's ~68M units in 4Q23.

The table below shows data from the above information.

From this table, 4Q24 saw a slight YoY decline in new iPhone shipments in the US. Interestingly, Japan - where Apple Intelligence is not yet available - recorded high single-digit YoY growth in the same period.

While my assumptions may introduce some margin of error, the data suggests that any YoY growth in US iPhone shipments, if present, was minimal. The earlier third-party surveys showing low user interest in 
Apple Intelligence align with my conclusion.

iPhone Revenue Resilient despite Shipment Drop, but ASP Strategy Shows Limits

According to my industry research, iPhone shipments fell 5.8% YoY in 4Q24, while revenue declined only 0.8% YoY, cushioned by mix improvement.

Pro models' share rose from 54% to 61% YoY, with users usually opting for higher storage tiers. This 
storage upgrade trend, particularly strong among Pro buyers, significantly boosts ASP. Not every 
company can counter declining shipments by raising prices, and this pricing power demonstrates 
Apple's brand strength.

However, the Pro mix uplift is reaching its ceiling. 4Q24 iPhone revenue YoY decline signals potential 
challenges ahead - without strategic adjustments, iPhone revenue could face a mid-single-digit YoY 
decline by 2026.

$Apple(AAPL.US)