*

iPhone sales up 13.5%, beating expectations

*

Cook attributes part of sales jump to buying ahead of

tariffs

*

Apple's ( AAPL ) Americas sales rise 9.3%

(Adds information about China subsidies, recasts first two

paragraphs with context about tariffs and US trade war)

By Stephen Nellis and Akash Sriram

SAN FRANCISCO, July 31 (Reuters) - Apple ( AAPL )

forecast revenue for the current quarter ending in

September well above Wall Street's estimates on Thursday,

sending shares up despite a warning from CEO Tim Cook that U.S.

tariffs would add $1.1 billion in costs over the period.

As the centerpiece of U.S. President Donald Trump's trade

war, those tariffs cost Apple ( AAPL ) $800 million in the June quarter

and spurred some customers to buy iPhones in late spring this

year. Those purchases helped Apple's ( AAPL ) fiscal third-quarter sales

beat expectations by the biggest percentage in at least four

years, according to LSEG.

The company still forecast growth, though, with Chief Financial

Officer Kevan Parekh saying the company expects revenue growth

for the current quarter in the "mid to high single digits,"

which would exceed the 3.27% growth to $98.04 billion that

analysts expected, according to LSEG data.

Apple ( AAPL ) reported $94.04 billion in revenue for its fiscal third

quarter ended on June 28, up nearly 10% from a year earlier and

beating analyst expectations of $89.54 billion, according to

LSEG data. Its earnings per share of $1.57 topped expectations

for $1.43 per share.

Apple ( AAPL ) shares were up 3% in after-hours trading, extending

gains after Apple ( AAPL ) provided its forecast.

Sales of iPhones, the best-selling product for the company

based in Cupertino, California, were up 13.5% to $44.58 billion,

beating analyst expectations of $40.22 billion.

Apple ( AAPL ) has been shifting production of products bound for the

U.S., sourcing iPhones from India and other products such as

Macs and Apple Watches from Vietnam.

The ultimate tariff rates many Apple ( AAPL ) products could face

remain in flux, and many of its products are currently exempt.

Sales in its Americas segment, which includes the U.S. and could

face tariff impacts, rose 9.3% to $41.2 billion.

In Greater China, where Apple ( AAPL ) has faced long delays in

approval to introduce AI features on its devices, sales were

$15.37 billion, up from a year ago and above expectations of

$15.12 billion, according to a survey of five analysts from data

firm Visible Alpha.

That gain was a turnaround from a year-over-year decline in

China sales in the March quarter.

In a conference call with analysts, Cook said some of that

was due to a subsidy program in China to help revive the

smartphone market, which boosted some of Apple's ( AAPL ) products.

"It was the first full quarter of the subsidy playing out," Cook

told analysts.

EARLY PURCHASES

In an interview with Reuters, Cook said the company set

seasonal records for upgrades of iPhones, Macs and Apple

Watches. He said Apple ( AAPL ) estimates about 1 percentage point of its

9.6% of sales growth in the quarter was attributable to

customers making purchases ahead of potential tariffs.

"We saw evidence in the early part of the quarter,

specifically, of some pull-ahead related to the tariff

announcements," Cook told Reuters, though he also said the

active user base for iPhones hit a record high in all

geographies.

The U.S. is still negotiating with both China and India, with

Trump saying India could face 25% tariffs as early as Friday.

However, analysts said India could still retain cost advantages

for Apple ( AAPL ) in the longer term.

"The pull-forward in demand due to tariffs was somewhat

expected given the uncertainty around pricing. However, it's

important to put this in context as this is typically a slow

quarter for Apple ( AAPL ), yet they still delivered exceptional results

with iPhone growth," Emarketer analyst Jacob Bourne said.

Tariffs are only one of Apple's ( AAPL ) challenges. The company

faces competition from rivals such as Samsung Electronics Co ( SSNLF )

in a tough market for premium-priced mobile phones.

On the software front, Apple ( AAPL ) faces challenges from Alphabet

, which is quickly weaving AI features into its

competing Android operating system.

While AI leaders Microsoft and Nvidia have seen their stock

market values soar to record highs, Apple's ( AAPL ) shares have fallen

17% in 2025, with investors concerned about the impact of

tariffs, and about what they view as slow progress integrating

AI features into its products.

Apple ( AAPL ) has delayed the release of an AI-enriched version of

Siri, its virtual assistant, but Cook said the company is

"making good progress on a personalized Siri." He also said

Apple ( AAPL ), which has thus far not engaged in the massive capital

expenditures of its Big Tech rivals to pursue AI, is

"significantly growing" its investments in artificial

intelligence.

"Apple ( AAPL ) has always been about taking the most advanced

technologies and making them easy to use and accessible for

everyone, and that's at the heart of our AI strategy," Cook

said.

Apple ( AAPL ) faces regulatory rulings in Europe that threaten to

undermine its lucrative App Store business. Apple ( AAPL ) said sales

from its services business, which includes the App Store as well

as music and cloud storage, were $27.42 billion, topping analyst

expectations of $26.8 billion.

Sales of wearables such as AirPods and Apple Watches were

$7.4 billion, missing estimates of $7.82 billion. Mac sales of

$8.05 billion beat expectations of $7.26 billion, while iPads

hit $6.58 billion in sales, missing expectations of $7.24

billion.

Apple ( AAPL ) said gross margins were 46.5% in the fiscal third

quarter, beating analyst expectations of 45.9%, according to

LSEG estimates. The company forecast gross margins for the

current quarter of 46% to 47%, with the entire range above

estimates of 45.9%, according to LSEG data.