tl;dr 🍬
Apple had a headline-grabbing week marked by major developments across legal, AI, and global strategy fronts. A U.S. judge ruled that Apple violated a court order by limiting how developers can link to external payment options—forcing big changes to App Store policies. Adding fuel to the fire, a senior Apple executive was accused of giving false testimony, with possible criminal consequences. Meanwhile, Apple announced a new partnership with AI firm Anthropic to build a code-writing assistant for Xcode, signalling deeper moves into generative AI.
On the global stage, Apple confirmed that it has ramped up iPhone production in India to sidestep upcoming U.S. tariffs, with plans to shift more of its supply chain there as soon as possible. Financially, the company posted $95.4 billion in Q2 revenue, with strong growth in iPads and services. And amid all this, a possible split launch strategy for the iPhone 18 series has emerged. Read more in this week’s Mission CMD 🚀
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CMD / Start 🏁
Some Epic Changes…
This week marked a major loss for Apple in its long-running legal battle with Epic Games over the App Store’s in-app purchase rules. While Apple won on most points in earlier rounds, this week the court ruled that Apple’s restrictions on developers communicating alternative purchasing methods—known as “anti-steering” rules—are anti-competitive.
Key Ruling Highlights:
- Apple cannot collect commission or track purchases made through external links.
- Developers must be free to communicate offers, use buttons and styled links, and guide users to external purchase options.
- Apple may not discourage users with “scare tactics” or limit app categories that can use these features.
The judge, Yvonne Gonzalez Rogers, accused Apple of malicious compliance, saying their 27% commission on external purchases was an attempt to maintain anti-competitive revenue streams. The court also alleged Apple’s VP of finance gave false testimony, referring him (and Apple) for possible criminal contempt charges.
Apple has updated its developer guidelines to comply with the ruling—at least in the U.S. storefront. Spotify has already leveraged the new freedom, while Epic claims Fortnite will soon return to the App Store.
Apple plans to appeal, but the damage to developer trust has many argue, already been done. With a legal battle against the Justice Department looming and WWDC25 on the horizon, some believe Apple should refocus on regaining goodwill from developers rather than squeezing revenue through restrictive practices.
Apple posts blockbuster Q2 earnings and a big update on green initiatives
This week Apple held its quarterly earnings call for investors, sharing key updates on its financials and performance between January and March of 2025. It was a March quarter record for Apple with some monster numbers. Here’s a few highlights:
- Revenue: $95.4 billion, up 5% year-over-year, surpassing analyst expectations.
- Net Profit: $24.8 billion, with earnings per share (EPS) of $1.65, marking an 8% increase year-over-year.
- Services Revenue: Achieved an all-time high of $26.65 billion, growing 11.6% year-over-year.
- Product Sales:
- iPhone: $46.84 billion (↑1.9%)
- Mac: $7.95 billion (↑6.7%)
- iPad: $6.4 billion (↑15.2%)
- Wearables, Home & Accessories: $7.52 billion (↓4.9%)
“Today Apple is reporting strong quarterly results, including double-digit growth in Services,” said Tim Cook, Apple’s CEO. “We were happy to welcome iPhone 16e to our lineup, and to introduce powerful new Macs and iPads that take advantage of the extraordinary capabilities of Apple silicon. And we were proud to announce that we’ve cut our carbon emissions by 60 percent over the past decade.”
Interestingly this was the first quarter in which the iPhone 16e was on sale. And it seems to have had the desired effect that Apple was hoping for, with iPhone revenue up around 2% year on year. Wearables perhaps unsurprisingly saw a revenue dip as in the same quarter last year, Apple released the Apple Vision Pro where it likely captured most of the devices small sales volume thanks to early adopters. And the new iPad models including the 11th gen iPad and M3 iPad Air gave the iPad a particularly strong revenue boost.
Run / Update ⚙️
A strategic partnership with Anthropic
A couple of days ago Bloomberg analyst Mark Gurman published a report citing anonymous sources, claiming that Apple has partnered with Anthropic, an AI safety and research firm which creates its own generative models. The partnership is part of a goal to create an AI enhanced version of Xcode, Apple’s coding platform. Apparently this project is pretty far into development, with the product already being used internally. It’s said to integrate Anthropic’s Claud Sonnet model, one of the best models for writing code.
A public release hasn’t been decided on at this stage Gurman states. But is currently being tested by engineers following the scrapped release of Apple’s previously announced Swift Assist. Apple never released Swift Assist as planned due to problems with hallucinations and accuracy that ironically could slow down development rather than augment it.
This is an interesting move for Apple. Generally Apple likes to own the primary technologies in its products. But in this case they’ve been much more willing to partner with others including of course Open AI, integrating chatGPT into Siri. And later this year Tim Cook has confirmed that Google Gemini will be an alternative model that users will be able to select instead of chatGPT.
My view is that this reflects a broader acknowledgement that Apple is working hard to catch up with competitors on AI while plugging the gap in its products with partnerships. At least for now. That said Tim Cook stated on the earnings call that the companies strategy on AI includes both in-house models and partnerships stating “It’s not all of one or the other.” He emphasised the importance of on-device processing as being a key differentiator for Apple thanks to their 10 year+ track record of building in neural engines into their silicon.
Launch / CTRL 👨🚀
Manufacturing shifts to India
As part of broader efforts to mitigate the impact of tariffs, Apple is working hard to shift much of its US manufacturing capacity to India. On this week’s earnings call, Tim Cook said that in the March quarter, about 50% of iPhones bound for the US were made in India. He said that Apple anticipates that the majority of iPhones and its other US-bound products will be made in India for the June quarter. Unsurprisingly, as Apple has mastery of its supply chain. And it makes sense that the firm would want to shift as much of its capacity outside of China as possible to diversify and protect against economic risk factors.
A split launch strategy for the iPhone 18
In what looks to be a significant shift in its product strategy, Apple is reportedly planning to stagger the release of future iPhones, starting with the iPhone 18 lineup. According to The Information, the company intends to launch its higher-end devices—including the iPhone 18 Pro, Pro Max, a new iPhone 18 Air, and a foldable iPhone in the usual September release window of 2026. The regular iPhone 18 and an updated version of the iPhone 16e (presumably the 18e) will then follow in the spring of 2027.
The move looks to be partly logistical, with Apple looking to smooth out the production cycle as the iPhone family expands to six models. In my view that makes sense. Fewer devices launching all at once means less strain on supply chain workers during peak periods and it’ll help to meet supply and demand..
The foldable iPhone is shaping up to be particularly interesting. It’s said to feature a book-style design with a 5.7-inch outer display and an inner screen that unfolds to nearly eight inches. Meanwhile, the Pro models may have under-display Face ID, leaving just a pinhole for the front-facing camera.
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