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Apple still depends more on the iPhone than on Services in revenue terms. In fiscal 2025, iPhone net sales were $209.586 billion, about 50.4% of Apple’s $416.161 billion in total net sales. Services generated $109.158 billion, about 26.2%. The iPhone therefore produced roughly 1.92 times as much revenue as Services, a difference of approximately $100.428 billion.
That answer changes when you examine growth and profitability. Services grew 14% in fiscal 2025, compared with 4% for iPhone, and Apple’s reported Services gross-margin rate was approximately 75.4%, versus an implied 36.8% for the Products category. Apple is diversifying away from iPhone concentration, but it has not become primarily a Services-revenue company.
Apple’s FY2025 revenue split
Apple reports iPhone and Services as separate net-sales categories in its annual filings. The following figures cover Apple’s fiscal years and use the company’s reported category sales. The percentages are calculated as each category’s sales divided by total net sales.
| Fiscal year | Total net sales | iPhone sales | iPhone share | Services sales | Services share |
|---|---|---|---|---|---|
| FY2023 | $383.285 billion | $200.583 billion | 52.3% | $85.200 billion | 22.2% |
| FY2024 | $391.035 billion | $201.183 billion | 51.4% | $96.169 billion | 24.6% |
| FY2025 | $416.161 billion | $209.586 billion | 50.4% | $109.158 billion | 26.2% |
In FY2025, iPhone revenue exceeded Services revenue by about $100.428 billion. Dividing $209.586 billion by $109.158 billion gives a ratio of approximately 1.92 to 1. Services were substantial—more than one-quarter of company sales—but the iPhone remained Apple’s largest individual category and supplied about half of all revenue.
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Is Apple becoming a Services company?
Apple’s mix is moving in that direction, but the transition is gradual rather than complete. iPhone’s share of total sales fell from approximately 52.3% in FY2023 to 50.4% in FY2025, a decline of about 1.9 percentage points over two years. Services’ share rose from approximately 22.2% to 26.2%, an increase of about four percentage points.
The change reflects both categories growing at different rates and the rest of Apple’s portfolio contributing the balance. iPhone sales were nearly flat between FY2023 and FY2024 before reaching $209.586 billion in FY2025. Services increased each year, from $85.200 billion to $96.169 billion and then to $109.158 billion.
Even after that shift, Services would need to more than double to approach iPhone revenue at the FY2025 levels. The more accurate description is that Apple is becoming less concentrated in iPhone revenue while building a larger, faster-growing Services business.
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Which business is growing faster?
FY2025 growth
Apple reported that iPhone net sales increased 4% year over year in FY2025. Services net sales increased 14%. Services therefore grew three-and-a-half times as quickly on a percentage basis during that year.
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Apple attributed Services growth primarily to advertising, the App Store and cloud services. Those drivers are different from the revenue event created when a customer purchases an iPhone, although the installed base of Apple devices can support usage of many Services.
What Apple’s quarterly comment adds
In Apple’s FY2025 fourth-quarter results release, CEO Tim Cook said: “Today, Apple is very proud to report a September quarter revenue record for iPhone and an all-time revenue record for Services.” The statement describes record performance in both categories, not a reversal of their relative size: iPhone remained larger for the full fiscal year.
Why profitability changes the dependence calculation
Revenue concentration does not show how much gross profit each category produces. Apple does not disclose an iPhone-only gross margin, but it does report gross-margin dollars for Products and Services.
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|---|---|---|---|
| Products | Approximately $307.003 billion, derived as total sales minus Services sales | $112.887 billion | Approximately 36.8%, calculated from reported figures |
| Services | $109.158 billion | $82.314 billion | Approximately 75.4%, calculated from reported figures |
The Services rate comes from $82.314 billion of gross margin divided by $109.158 billion of Services sales. The Products rate comes from $112.887 billion divided by approximately $307.003 billion of Products sales. These are calculations using Apple’s reported FY2025 numbers, not separate margin disclosures for individual products.
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Services generated less revenue than Products but converted a much larger proportion of that revenue into gross margin. Its approximately 75.4% gross-margin rate was more than twice the implied Products rate of approximately 36.8%. Products still generated more gross-margin dollars in total—$112.887 billion versus $82.314 billion—because Products sales were much larger and include the iPhone, Mac, iPad, Wearables, Home and Accessories categories.
Consequently, it is not possible to answer “Does Apple make more gross profit from iPhones or subscriptions?” from the 10-K. Apple does not publish iPhone gross-margin dollars separately, and Services are broader than subscriptions. The filings support a narrower conclusion: Products as a whole produced more FY2025 gross-margin dollars, while Services had a substantially higher margin rate.
What Apple includes in Services
Apple’s Services category is a collection of platform, advertising, cloud and subscription businesses. It includes:
- Advertising
- The App Store
- Cloud services
- Apple Music
- Apple TV
- Apple Arcade
- Apple Fitness+
- Related subscription and platform offerings
Apple reports these activities collectively. It does not provide FY2025 revenue for Apple Music, the App Store, cloud services or any other individual Services product in the cited annual filing. That means no defensible calculation can show what percentage of Apple’s total sales comes from subscriptions alone, or rank the individual Services products by revenue.
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Five ways to define “dependence”
1. Revenue concentration
On the simplest financial measure, Apple is still iPhone-dependent. The iPhone represented about 50.4% of FY2025 net sales, compared with Services at about 26.2%. Losing or materially weakening the iPhone category would therefore put a much larger portion of reported revenue at risk than a comparable decline in Services.
2. Revenue growth
On the growth measure, Services currently have the stronger momentum. Their 14% FY2025 increase exceeded the iPhone’s 4% increase. A business can remain the largest source of revenue while another category grows faster and gradually changes the mix.
3. Gross-margin economics
On margin rate, Services are more economically efficient. Approximately three-quarters of Services sales became gross margin in FY2025, compared with a little under two-fifths for the aggregate Products category. This is why Services can matter disproportionately to profitability even though they contribute only about one-quarter of sales.
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An iPhone sale is a hardware transaction recognized when the device is sold. Services combine recurring subscriptions, ongoing cloud usage, App Store activity and advertising. That mix can create continuing revenue opportunities associated with an existing customer relationship, although Apple does not disclose how much of Services revenue is recurring, advertising or transactional.
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5. Ecosystem exposure
The two categories also carry different forms of business exposure. iPhone performance is tied directly to demand for Apple’s flagship hardware. Services depend on continued use of Apple’s platforms, customer subscriptions, App Store activity, cloud consumption and advertising demand. Because Apple reports Services in one aggregate line, the filings do not quantify the sensitivity of each component to changes in usage, pricing or platform conditions.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the three-year trend means for investors and readers
The shift from a 52.3% iPhone share in FY2023 to 50.4% in FY2025 is meaningful, but it is not a structural handoff of the company to Services. Services gained share while iPhone revenue also reached a new FY2025 high of $209.586 billion. The mix changed because Services expanded faster, not because iPhone ceased to be a large business.
A useful mental model is “iPhone-led, Services-amplified.” The iPhone remains the primary revenue anchor. Services add a high-margin layer across Apple’s platforms and provide a growing portion of sales that is not dependent on selling a new device in every transaction.
What Apple does and does not disclose
Figures that are established
- FY2025 iPhone sales were $209.586 billion.
- FY2025 Services sales were $109.158 billion.
- Total FY2025 net sales were $416.161 billion.
- iPhone represented approximately 50.4% of total sales and Services approximately 26.2%.
- iPhone sales grew 4% and Services sales grew 14% in FY2025.
- Services gross-margin dollars were $82.314 billion, and Products gross-margin dollars were $112.887 billion.
Figures that are not established by the filings
- Revenue for each individual Services product.
- An iPhone-only gross-margin rate or gross-profit total.
- The exact portion of Services revenue that is subscription-based.
- A direct measure of how much Services revenue depends on a particular device model or customer cohort.
Keeping those boundaries in mind prevents an apparently precise answer from overstating what Apple reports.
Bottom line: iPhone dependence is declining, not disappearing
Apple’s FY2025 numbers support two conclusions at once. The iPhone is still the company’s dominant revenue source, producing about half of sales and nearly twice the revenue of Services. Services are the faster-growing and higher-margin business, supplying about one-quarter of sales and a disproportionate share of gross-profit economics. Apple is diversifying its revenue mix around Services, but the company remains fundamentally iPhone-led in absolute revenue terms.
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