Apple has officially sold over 3 billion iPhones since the device first hit the market in 2007. The milestone was confirmed by CEO Tim Cook during the company’s latest earnings call for the third quarter. It took Apple nine years to sell its first billion iPhones and another nine to hit the 3-billion mark, highlighting the iPhone’s continued demand even after 17 years.

While the total sales figure is a moment to celebrate, what may matter more in the short term is that Apple’s iPhone business is showing signs of strength again. For the quarter ending in June, iPhone sales rose 13% year-on-year to $44.5 billion, beating Wall Street’s expectations of around $40 billion. The iPhone remains Apple’s most important product and contributed nearly half of the company’s $94 billion total revenue for the quarter.

Interestingly, iPhone demand also bounced back in China, one of Apple’s most challenging markets lately. The company posted $15.3 billion in revenue from China this quarter, slightly up from $14.7 billion in the same period last year.

But despite strong iPhone sales, Apple still trails Microsoft and Nvidia in terms of market valuation. The company’s stock performance has been underwhelming in 2025, down nearly 15% since the beginning of the year, missing out on the broader tech rally driven by AI developments.

One big concern for the next quarter is tariffs. Tim Cook warned that Apple expects to pay around $1.1 billion in tariff-related costs in the upcoming September quarter, up from $800 million this quarter. These are linked to import duties imposed by the Trump administration, which could impact the cost of devices imported into the US.

To manage the impact, Apple has shifted most of its US-bound iPhone production to India. When asked about the company’s manufacturing strategy, Cook confirmed that “the vast majority” of iPhones sold in the US are now made in India. He added that there has been no major change in Apple’s approach to assembly in the last few months.

Apple also continues to highlight its strong US presence, noting that nearly 19 billion chips are being produced domestically.

Even as Apple’s financial results show stability, investors are increasingly focused on how the company plans to compete in the AI space. Rivals like Microsoft and Meta are seeing major gains thanks to their aggressive AI strategies. Apple, meanwhile, is still being questioned about its roadmap.

Tim Cook addressed this during the call, saying he believes the iPhone will remain central even in an AI-driven world. “It’s difficult to see a world where iPhone’s not living in it,” he said, suggesting that AI-powered tools would complement, not replace, the iPhone.

For now, Apple may have posted a strong quarter, but all eyes will be on how it deals with rising trade tensions and how soon it can prove its value in the ongoing AI race.

– Ends