One of the world's most valuable companies, with a deep dependency on Chinese manufacturing that has become a liability amid Donald Trump's trade war. Apple's market value shed close to $800bn between late December 2024 and mid-2025, owing to its lack of an AI strategy and tariff exposure. One in five of Apple's suppliers is Chinese.
Apple was founded in the 1970s, when the idea that parts or machines would be made outside a company's watch, or outside America, was alien to the early computer industry. But in the late 1990s Apple began offshoring its production to contract manufacturers. It handed over production of the iPod to Foxconn, after which sales soared from fewer than 1m units in 2003 to more than 22m in 2005. This success was replicated on an even bigger scale with the iPhone, starting in 2007. By 2015 Apple was investing somewhere in the region of $55bn per year in China. It flies a constant stream of thousands of engineers to train suppliers.
Tim Cook, Apple's boss, was the architect of the company's heavy presence in China. Under Xi Jinping's rule, Chinese officials have wanted more from the firm, often in the form of technology transfers. Officials have been told to stop buying iPhones, and Apple's smartphone sales in China have tumbled as Mr Xi has pushed Chinese consumers towards local devices such as those made by Huawei. Apple sold $67bn in China last year, down 10% from its peak. In April 2025 conventional Safari searches fell for the first time, a sign of the shift towards AI chatbots.
On July 15th 2025 Apple struck a $500m deal with MP Materials, America's sole rare-earth producer, to buy magnets and help build a rare-earth recycling facility. In August 2025 Tim Cook unveiled a $600bn, four-year investment pledge into America—described by the company as more of an update than a change of plan.
In early April 2025 rapid escalation between America and China threatened to hit iPhones with 145% tariffs. A preliminary deal on May 12th sent tariffs for most Chinese imports down to 30% for 90 days. Apple has reportedly scrambled to move some iPhone production from China to India.
Apple was slower than its fellow tech giants to embrace generative AI. Its attempt to rebuild its Siri voice assistant around the technology has been beset by bugs, and the overhaul was indefinitely postponed. In early 2026 Apple announced it would use Alphabet's Gemini large language models to power an upgraded Siri planned for later in the year. Apple is also reportedly working on a wearable pin and on smart glasses, building on technology developed for its Vision Pro VR headset. Apple Intelligence, the firm's AI strategy unveiled in mid-2024, is no match for rival voice-activated assistants such as Google's Gemini. At its June 2025 Worldwide Developers Conference, which began on June 9th, Apple unveiled a visual overhaul of its operating systems called "Liquid Glass" and announced a deeper partnership with OpenAI. With users' permission, ChatGPT will be given more access to their devices—for example, to answer queries about what is on their screens—and will be baked into Apple's programming tools. Apple's share price was down by almost a fifth in 2025, the most of any of America's five biggest tech firms.
Eddy Cue, Apple's head of services, has admitted that AI could make the iPhone irrelevant within ten years. Rivals including Meta, Google and Chinese firms such as Xiaomi and Baidu are exploring AI-infused smart glasses, while OpenAI announced a $6.4bn deal to buy a firm created by Jony Ive, Apple's former chief designer,, to build an AI device. Apple's investment in its Vision Pro virtual-reality headset, though so far an expensive flop, may provide enough expertise to shift quickly to smart glasses if the form factor takes off.
Apple makes most of its money selling hardware—unlike rivals such as Google and Meta, whose business models depend on collecting and analysing data to sell personalised ads. Its prioritisation of user privacy makes it harder to train personalised AI models, because it relies on aggregate "differential privacy" insights rather than the granular data harvested by firms such as Google. Privacy has also encouraged Apple to run AI on its own devices rather than investing in cloud infrastructure, where chatbots have advanced more rapidly.
To reverse a decline in its revenue in China, Apple desperately needs a local partner to provide AI services which customers now expect, but reports suggest America may block it from doing so. Without local AI applications, American tech products such as the iPhone risk becoming also-rans in China.
Apple makes earphones that double as hearing aids and watches capable of carrying out electrocardiograms or calling an ambulance if the wearer falls. By 2025 some 17% of over-65s owned a smartwatch, partly as a result.
Apple uses an AI-powered robotic disassembly system called Daisy. A decade ago an early version could dismantle only one type of iPhone; by 2025, with the help of AI, Daisy can handle more than 20.
Services have been the brightest spot of Tim Cook's tenure, generating $96bn in revenue last year. But two pillars of the business face legal and regulatory challenges. Google pays Apple tens of billions of dollars a year to be the default search engine on the iPhone. On September 2nd 2025 Judge Amit Mehta's antitrust ruling against Alphabet allowed these payments to continue, a big reprieve for Apple; the judge said banning them risked "crippling" harm to companies that rely on them. In early 2026 Apple confirmed it would deepen its partnership with Google, using Alphabet's Gemini AI products on the iPhone. Google has vowed to appeal against the original monopoly verdict. After a bust-up with a judge during its long-running fight with Epic Games over how it runs its App Store, Apple was slapped with a court order that jeopardises the roughly $30bn it takes each year in app-related fees. Separately, app-store commissions, which Bank of America estimates at $31bn a year, are under scrutiny from the EU's Digital Markets Act and an American antitrust lawsuit brought by Epic, a gaming firm.
Tim Cook took over from Steve Jobs in 2011. Under his leadership, Apple's annual sales rose from $108bn to $416bn, operating profit from $34bn to $133bn, and market capitalisation from around $350bn to $4trn. Only Jensen Huang of Nvidia has created more shareholder value overall. No CEO comes close to Cook's record of producing nearly $1trn in cumulative net income. Critics compare his management style to that of Jack Welch at General Electric: metronomic reliability and "process over product" rather than flashy hardware innovation.
On April 20th 2026 Apple named John Ternus, its 50-year-old hardware chief, as the new chief executive, effective September 2026. Cook, 65, will become executive chairman. Ternus's first product launch is expected to be a foldable phone. Johny Srouji, who has led Apple's chip strategy, was given a more powerful new role—suggesting the company is betting primarily on hardware rather than software to carry it forward.
The iPhone 17, launched in September 2025 with Apple's latest in-house chips, triggered one of the biggest upgrade cycles in years. In March 2026 Apple launched the MacBook Neo, a $599 laptop using iPhone chips to compete at the low end of the PC market; it reportedly sold out in April. The Mac mini, an ultra-compact PC without a screen launched in 2024, has also been flying off shelves as users find it ideal for running always-on AI agents. Apple has approximately 2.5bn active devices globally; one analyst estimates it could nearly double that to 4.5bn over the next 15 years. Apple is close to generating $1bn in AI-related revenue via App Store commissions, despite having no flagship AI product of its own.
What the large print giveth, the small print taketh away.