The Most Important Thing for Apple Stock (AAPL) Investors to Watch in 2025
Key Takeaways
Apple needs to find a way to solve its smartphone problem in China or create a new revenue stream.
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6 min read
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investment
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July 28, 2025
12:43 AM
The Motley Fool
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The analysis indicates that Apple (AAPL 0. 07%) used to be the most valuable company in the world
It used to be the undisputed bellwether of nology stocks, amid market uncertainty
It used to be the dominant smartphone maker in the all-important China market
Additionally, And it used to be the one name that you could count on to der outsize returns for your investment portfolio
None of that is true any longer
Additionally, And while Apple is still one of the "Magnificent Seven" stocks and has a market capitalization of $3 (this bears monitoring). 2 trillion, it's not the growth driver of recent years
Moreover, Conversely, Apple is down 14% so far in 2025, far below the greater market (which is quite significant)
Furthermore, Among its Magnificent Seven peers, only Tesla is having a worse year (remarkable data)
AAPL data by YCharts What will it take for Apple to turn things around
However, What the data shows is stock is up 6% in the last month, giving investors some hope for the second half of 2025
Apple holders should be deeply concerned Apple's falling market in China, and that's the most important metric I'm watching for the rest of 2025, as it's critical to Apple's largest revenue and a market where Apple is showing vulnerability
Though it's not the only area of concern
However, Image source: Getty Images, amid market uncertainty
Chinese smartphones are becoming a blem for Apple Apple entered the Chinese smartphone market in 2010 and gradually increased its market, topping $70 billion a year in 2022 and 2023
Apple had a huge advantage in China as U
Moreover, Sanctions restricted a Chinese competitor, Huawei, from American nology, and Apple's smartphones were the most advanced in the market, given current economic conditions
But that began to change in the second half of 2023 as Huawei launched new 5G phones with locally made chips, much to the surprise of even analysts who cover the industry
Furthermore, There are also national subsidy grams in China that make smartphones more affordable, but they are only for phones priced below 6,000 renminbi ($838), which is below Apple's price point (remarkable data)
Apple's market in China fell from 21% in the fourth quarter of 2023 to 15% in the first quarter of 2025, while both Huawei and Xiaomi have market s of 19%, according to Counterpoint Re
Furthermore, That trend continued into the second quarter, as Apple sales in Greater China dropped 2% on a year-over-year basis, even as sales in other geographic areas rose, in today's market environment
Moreover, Region Fiscal Q2 2025 Sales (ending March 29, 2025) Fiscal Q2 2024 Sales (ending March 30, 2024) Percent gain (loss) Americas $40. 3 billion $37 (fascinating analysis). 8 billion 8% Europe $24. 4 billion $21. 1 billion 1% Greater China $16 billion $16. 4 billion (2%) Japan $7. 3 billion $6, given current economic conditions
However, Moreover, 2 billion 17% Other Asia-Pacific $7. 3 billion $6, in light of current trends. 7 billion 8% Totals $95
Furthermore, In contrast, 3 billion $90. 7 billion 5% Data source: Apple, in today's market environment
So, Apple's weakness in China is having a significant impact on the company's revenue growth
Additionally, Apple is fitable, but growth is weak Apple was a growth stock when the company was, well, growing
In contrast, But its revenue and earnings growth has flatlined since 2023
Additionally, AAPL Revenue (Annual) data by YCharts The company is still getting strong revenue growth from its lucrative Services segment, which includes the App store, Apple Music, its iCloud services, Apple Pay and Apple Card
On the other hand, Segment Fiscal Q2 2025 (ending March 29, 2025) Fiscal Q2 2024 (ending March 30, 2024) Percent gain (loss) iPhone $48 (noteworthy indeed), considering recent developments. 84 billion $45. 96 billion 6. 94 billion $7
Additionally, Nevertheless, 45 billion 6. 6% iPad $6. 4 billion $5
Moreover, 55 billion 15
Furthermore, Nevertheless, 3% Wearables, and Accessories $7, given current economic conditions. 52 billion $7, in light of current trends. 91 billion (4
However, 9%) Services $26, considering recent developments. 64 billion $23. 86 billion 11
Moreover, 6% Totals $95
On the other hand, 3 billion $90 (noteworthy indeed). 7 billion 5% Data source: Apple (which is quite significant), given current economic conditions
The Services segment is one of the best things in Apple because the company doesn't have to invest the same type of re and development into Services as it does in creating new advancements to the iPhone, considering recent developments
On the other hand, Companies that want to post a new application in the App Store of make music available through Apple simply pay it a cut
Apple's iPhone releases used to be closely watched because the company, in its heyday, made some revolutionary changes to smartphones (something worth watching)
Things the introduction to the App store, the launch of the Siri assistant, touchscreens, forward- and rear-facing cameras, and facial recognition encouraged people to trade in their iPhones for the model
Nevertheless, But today's iPhones don't have the same kind of nological advancement, so people seem much more willing to hold on to iPhones for a longer period of time
Conversely, Considering that Apple makes the lion's of its money on iPhone sales, that is a blem
On the other hand, Tariffs are a huge concern Apple makes most of its ducts in China, which is locked in a trade war with the United States that doesn't appear to be ending anytime soon, in today's market environment
On the other hand, In fact, President Donald Trump has threatened Apple with a 25% tariff if the company doesn't move its iPhone duction to the U, considering recent developments
Apple is in the cess of moving some of its duction to Vietnam and India, but that's a long cess and it doesn't shield Apple from the bulk of the tariff threat
Apple is vulnerable on both ends of the trade war
In China, it's penalized for being a U
In contrast, Company and is battling for market against companies that are making lower-cost ducts and taking advantage of government subsidies
At the same time, , its facing the specter of higher manufacturing and shipping costs, both which would either cut into the company's fit margins or force it to pass on costs to customers, given the current landscape
Looking ahead for the rest of 2025 Apple reports its fiscal third-quarter earnings on July 31, in today's financial world
Investors should be watching if sales in Greater China continue to decline and how that affects Apple's overall revenue and income growth
However, Apple won't be losing money -- it still churns out fits and a small dividend clockwork -- but it's no longer the growth giant that it was in the past despite trading at nearly 28 times forward earnings (an important development)
On the other hand, On the other hand, Until Apple solves its China blem or creates a new source of revenue, investors shouldn't expect the stock to outperform the market.
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