Apple cannot make enough of its newest toy, and the market is applauding. Revenue is up 12% to $114.48 billion. The foldable iPhone Duo is sold out before it has even shown up in the books. The chief operating officer says he can't say when supply will catch demand. For a company worth trillions, that is less a problem than a victory lap.
Look at the line that got less attention. Apple says its margin will be squeezed by higher memory costs, product mix, and the expense of Siri's AI. That is the AI boom sending the bill to the rest of us.
Memory chips are getting pricier in part because the data-center gold rush is soaking up supply. Apple is large enough to negotiate, hedge and absorb some of that. Your cousin buying a laptop for community college, or a parent replacing a cracked phone, is not. Whoever eats the cost, it will not be the companies that launched this arms race on the promise that AI would make life cheaper and better. They have built a speculative boom and are quietly making everyone else subsidize the hardware.
Then there's the number that tells you what Apple really is. Services brought in $31.57 billion this quarter, about 28 cents of every revenue dollar. Services means the App Store, iCloud, payments and subscriptions. Apple's services margin has run around 75%, versus the mid-40s it is now guiding for the whole company. That is a toll booth. Developers who want to reach iPhone owners have long had little choice but to pay Apple's commission and play by Apple's rules, and those costs flow into the price of everything from apps to streaming subscriptions. Courts and regulators are only now prying that gate open. A federal judge found Apple in contempt in the Epic case for stalling on the order to allow outside payment links. The Justice Department's antitrust suit is still grinding on. Europe already forced changes. Apple's response has been to fight every inch.
The defense deserves a hearing. People buy iPhones voluntarily, Apple's privacy stance is real, and its devices last longer than most of the junk in this industry. Nobody is forced to buy a foldable phone. All fair. But "nobody forced you" is a strange standard for a company that controls the gateway through which hundreds of millions of people reach the digital economy. Choice means little when the alternative to Apple's terms is exile from the platform.
The quarter also shows who is missing from the earnings call. The workers who assemble these devices, mostly in contract factories abroad, appear nowhere in the scoreboard. Neither do the taxpayers of countries Apple spent years working around. In 2024, the European Union's top court upheld a roughly €13 billion Irish tax order against it. Apple's profits are not simply the reward for good design. They also reflect market power, labor arrangements and tax strategy that deserve as much scrutiny as the product keynotes.
Liberals should resist both the lazy anti-tech scold and the gadget cheerleader. The point isn't that Apple is evil. It's that a company this dominant should not get to treat its margins as natural law. When it warns of cost pressure, the right question is who is allowed to pass costs along, who must absorb them, and who set the rules. A fold-out phone is a marvel. A platform that taxes everyone who builds on it, and shrugs while an AI bubble inflates the price of basic components, is a policy problem. Congress and the courts should keep treating it as one.
How it may affect me
Memory costs are rising across the industry, and Apple itself cites them as a margin pressure. If you plan to buy a phone, laptop or tablet, expect fewer discounts and possibly higher prices on new models. Previous-generation devices and refurbished units may be the better value. Subscriptions billed through Apple can also carry App Store fees, so compare prices when you can pay the provider directly.
