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Apple reports 'better than expected' earnings driven by iPhone sales

Apple reported second-fiscal quarter earnings on Thursday that beat Wall Street’s soft expectations for sales and revenue, driven by stronger-than-anticipated iPhones sales. Apple CEO Tim Cook told CNBC that the quarter was “better than we expected.” 

However, Apple’s overall sales fell for the second quarter in a row.  Apple shares rose less than 1% in extended trading.

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Here’s how the company did versus Wall Street expectations per Refinitiv consensus expectations: 

  • EPS: $1.52 vs. $1.43 expected 
  • Revenue: $94.84 billion vs. $92.96 billion expected 
  • Gross margin: 44.3% vs. 44.1% expected 

Apple reported $24.16 billion in net income during the quarter versus $25.01 billion last year. Overall revenue was down 3% from last year’s $97.28 billion in sales.

Here’s how Apple’s individual product lines did versus StreetAccount consensus expectations: 

  • iPhone revenue: $51.33 billion vs. $48.84 billion expected 
  • Mac revenue: $7.17 billion vs. $7.80 billion expected 
  • iPad revenue: $6.67 billion vs. $6.69 billion expected 
  • Other Products revenue: $8.76 billion vs. $8.43 billion expected 
  • Services revenue: $20.91 billion vs. $20.97 billion expected 

Apple didn’t provide formal guidance, continuing its practice that dates back to 2020 and the start of the Covid-19 pandemic. Management typically provides some data points on a call with analysts.

The highlight of Apple’s report was iPhone sales, which grew from the year-ago quarter even as the broader smartphone industry contracted nearly 15% during the same time, according to an IDC estimate.  

IPhone revenue grew 2% during the quarter, suggesting that parts shortages and supply chain issues that had hampered the product for the last few years, including an iPhone factory shutdown late last year, had finally abated.  

“It was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats,” Cook told CNBC’s Steve Kovach.  

Chief Executive Officer (CEO) of Apple Tim Cook waves to people during the opening of the first Apple Inc. flagship store in Mumbai, India on April 18, 2023.

Imtiyaz Shaikh | Anadolu Agency | Getty Images

Apple’s Mac and iPad businesses didn’t fare as well. The company warned last quarter that both business segments would decline, partially due to parts shortages, but they decreased more than expectations.  

Apple’s Mac business fell more than 31% to just over $7.17 billion. But it’s a difficult comparison versus the same time last year when Apple was still benefiting from the end of a pandemic boom in PC sales and a shift to its own chips that offer longer laptop battery life.  

“There’s really two reasons for that,” Cook said. “One is the macro situation in general. And the other is where we’re still comparing to the very difficult compare of the M1 MacBook Pro 14 and 16-inch from the year-ago quarter.” 

Revenue from iPads declined nearly 13% to $6.67 billion.  

Apple’s Services business includes monthly subscriptions, revenue from Apple’s App Store, warranties, and search licensing revenue from companies like Google. Apple reported $20.9 billion in services revenue, a 5.45% annual increase, showing that the company’s most highest-margin line of business continues to grow.  

Apple’s wearables division, including Apple Watch and headphones such as AirPods, dropped 1% during the quarter, beating analyst expectations. Last fall, Apple released a more expensive Apple Watch, called Ultra.  

Apple’s greater China business, which includes Taiwan and Hong Kong in addition to the mainland, reported $17.81 billion in sales, down from last year’s $18.34 billion. Analysts had hoped that China’s demand for electronics would rise this year as the company exits out of Covid-era lockdowns and other restrictions.  

While sales shrunk in most regions that Apple monitors, they grew in its Asia Pacific region to $8.11 billion.

Cook was optimistic about Apple’s prospects in India. Cook visited India last month to open Apple stores and meet with politicians.  

“The switcher and first-time buyer metrics look very good there for India,” Cook said. Apple uses the term “switcher” to refer to first-time iPhone buyers who previously had Android devices.  

As expected, Apple’s board authorized $90 billion in share repurchases and dividends. Apple said it paid $23 billion in buybacks and dividends in the March quarter. Apple also raised its dividend 4% to 24 cents per share.  

Cook also said that Apple was not planning layoffs like those that other big tech companies have started over the past year.  

“I view that as a last resort and, so, mass layoffs is not something that we’re talking about at this moment,” Cook said.  

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How quantum could supercharge Google’s AI ambitions

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How quantum could supercharge Google’s AI ambitions

Inside a secretive set of buildings in Santa Barbara, California, scientists at Alphabet are working on one of the company’s most ambitious bets yet. They’re attempting to develop the world’s most advanced quantum computers.

“In the future, quantum and AI, they could really complement each other back and forth,” said Julian Kelly, director of hardware at Google Quantum AI.

Google has been viewed by many as late to the generative AI boom, because OpenAI broke into the mainstream first with ChatGPT in late 2022.

Late last year, Google made clear that it wouldn’t be caught on the backfoot again. The company unveiled a breakthrough quantum computing chip called Willow, which it says can solve a benchmark problem unimaginably faster than what’s possible with a classical computer, and demonstrated that adding more quantum bits to the chip reduced errors exponentially. 

“That’s a milestone for the field,” said John Preskill, director of the Caltech Institute for Quantum Information and Matter. “We’ve been wanting to see that for quite a while.”

Willow may now give Google a chance to take the lead in the next technological era. It also could be a way to turn research into a commercial opportunity, especially as AI hits a data wall. Leading AI models are running out of high-quality data to train on after already scraping much of the data on the internet.

“One of the potential applications that you can think of for a quantum computer is generating new and novel data,” said Kelly. 

He uses the example of AlphaFold, an AI model developed by Google DeepMind that helps scientists study protein structures. Its creators won the 2024 Nobel Prize in Chemistry. 

“[AlphaFold] trains on data that’s informed by quantum mechanics, but that’s actually not that common,” said Kelly. “So a thing that a quantum computer could do is generate data that AI could then be trained on in order to give it a little more information about how quantum mechanics works.” 

Kelly has said that he believes Google is only about five years away from a breakout, practical application that can only be solved on a quantum computer. But for Google to win the next big platform shift, it would have to turn a breakthrough into a business. 

Watch the video to learn more.

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Nintendo Switch 2 retail preorder to begin April 24 following tariff delays

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Nintendo Switch 2 retail preorder to begin April 24 following tariff delays

An attendee wearing a Super Mario costume uses a Nintendo Switch 2 game console while playing a video game during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention centre in London, Britain, April 11, 2025. 

Isabel Infantes | Reuters

Nintendo on Friday announced that retail preorder for its Nintendo Switch 2 gaming system will begin on April 24 starting at $449.99.

Preorders for the hotly anticipated console were initially slated for April 9, but Nintendo delayed the date to assess the impact of the far-reaching, aggressive “reciprocal” tariffs that President Donald Trump announced earlier this month.

Most electronics companies, including Nintendo, manufacture their products in Asia. Nintendo’s Switch 1 consoles were made in China and Vietnam, Reuters reported in 2019. Trump has imposed a 145% tariff rate on China and a 10% rate on Vietnam. The latter is down from 46%, after he instituted a 90-day pause to allow for negotiations.

Nintendo said Friday that the Switch 2 will cost $449.99 in the U.S., which is the same price the company first announced on April 2.

“We apologize for the retail pre-order delay, and hope this reduces some of the uncertainty our consumers may be experiencing,” Nintendo said in a statement. “We thank our customers for their patience, and we share their excitement to experience Nintendo Switch 2 starting June 5, 2025.”

The Nintendo Switch 2 and “Mario Kart World bundle will cost $499.99, the digital version “Mario Kart World” will cost $79.99 and the digital version of “Donkey Kong Bananza” will cost $69.99, Nintendo said. All of those prices remain unchanged from the company’s initial announcement.

However, accessories for the Nintendo Switch 2 will “experience price adjustments,” the company said, and other future changes in costs are possible for “any Nintendo product.”

It will cost gamers $10 more to by the dock set, $1 more to buy the controller strap and $5 more to buy most other accessories, for instance.

WATCH: Nintendo has ‘a lot of work to do’ to convince casual users to upgrade to Switch 2: Kantan Games

Nintendo has 'a lot of work to do' to convince casual users to upgrade to Switch 2: Kantan Games

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Etsy touts ‘shopping domestically’ as Trump tariffs threaten price increases for imports

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Etsy touts 'shopping domestically' as Trump tariffs threaten price increases for imports

An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.

Victor J. Blue/Bloomberg via Getty Images

Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.

In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.

“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.

Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.

By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.

Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.

Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.

Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”

“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”

Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.

Etsy shares are down 17% this year, slightly more than the Nasdaq.

WATCH: Amazon CEO Andy Jassy says sellers will pass cost of tariffs on to consumers

Amazon CEO Andy Jassy: Sellers will pass increased tariff costs on to consumers

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