Apple Q2 FY25 Earnings Prep

Apple will post its earnings after the close on Thursday, May 1, 2025. Wall Street anticipates an EPS of $1.61, a 5.2% increase from the $1.53 for the same quarter last year. Some of the most critical items to look out for in the upcoming earnings are mentioned below.

iPhone Market Share

Apple's global smartphone market share fell to 18% in 2024, impacting its competitive positioning, especially as Chinese vendors Oppo, Xiaomi, and Vivo collectively hold a 30% market share, according to Counterpoint Research.

During Q1 FY25, Apple's Greater China revenue fell by 11%, and iPhone sales fell almost 1% to $69.14 billion. We will be watching iPhone sales figures closely to identify trends — a continued drop can damage Apple's top line, given that iPhones generated 56% of the company's revenue during Q1 FY25.

Production Line Shifting to India

Apple is accelerating plans to shift production from China to India, a strategy aimed at reducing exposure to risks from mounting U.S.-China tensions. The relocation began after COVID lockdowns caused production disruption in China.

In the 12 months ended March 2025, Apple assembled $22 billion worth of iPhones in China. Bloomberg reported recently that Apple will double its iPhone production in India annually from 40 million to 80 million units. Interestingly, Apple sells roughly 60 million iPhones annually in the United States alone, so this increase in production could fully meet American demand and, if successful, significantly reduce geopolitical risks.

Apple Store in Chengdu, China - Photo by Bangyu Wang on Unsplash

Management's Game Plan on Tariffs

To date, Apple shares have declined by approximately 16.8% year-to-date, largely because of tariff concerns and weaker iPhone sales. Currently, U.S. tariffs on China stand at 145%, while China's tariffs on the U.S. are at 125%. On April 12, the Trump administration excluded smartphones, computers, and other electronics from the 125% tariff, but they are still subject to a flat 20% tariff.

Though this provides a temporary reprieve for Apple, skepticism lingers as the Trump administration has signaled that it will reconsider tariffs on the semiconductor and electronics supply chain. Despite the temporary relief, Apple faces risks due to its high dependence on China, where 90% of iPhones are manufactured.

Some analysts suggest that Apple may raise product prices to pass on higher costs to the consumers.

Siri AI Delays

Apple's delay in pushing significant AI updates to Siri has raised fears that it is falling behind rivals. Executives called the delay "embarrassing" and "ugly," according to reports. Amazon, Google, and Microsoft, in the meantime, continue to unveil impressive new AI features.

Critics argue that Apple hyped features it failed to launch, tarnishing its long reputation for finished, polished announcements. Apple has targeted a more conversational Siri update in 2026 — an interesting delay given the rapid advancement of AI technology.

Market Sentiment

Apple’s average price target stands at $238.59, according to the Wall Street Journal. The upcoming earnings report will be crucial in determining whether this target is achievable, providing further insights into Apple's financial health.

Stay tuned to our Mag 7 coverage for more updates.