• UBS estimates iPhone sell-through fell 18% YoY in June, signaling softening demand.
  • June quarter shipments projected at 45M units, up 3.4% YoY, exceeding prior forecasts.
  • Weaker dollar may provide modest revenue lift; UBS maintains Neutral rating with $210 target.

iPhone Demand Slows as Shipments Defy Expectations

Apple Inc. faced a stark divergence in iPhone performance last month, with UBS reporting an 18% year-over-year decline in June sell-through—a key indicator of end-user demand. However, the bank raised its shipment forecast for the quarter to approximately 45 million units, a 3.4% increase from last year and above its earlier projections.

The discrepancy suggests inventory adjustments or stronger performance in earlier months, according to analysts. "The June slowdown is concerning but not catastrophic," said one sector specialist, noting that currency tailwinds could soften the blow. A weaker US dollar is expected to provide a slight revenue boost by making iPhones more competitively priced abroad.

Services Shine as Hardware Stumbles

While iPhone revenue grew just 2% in Apple's Q2 2025—its share of total revenue dipping to 49%—the company's Services segment hit a record $26.6 billion, up 12% YoY. This continues a multi-quarter trend of Services outpacing hardware growth, now accounting for 28% of total revenue.

"The Services growth story remains intact," noted an institutional investor, speaking on condition of anonymity. "But hardware cycles still move the needle for investor sentiment." Mac and iPad revenues grew 7% and 15% respectively last quarter, while Wearables declined 5%.

Looking Ahead

All eyes are now on how Apple navigates emerging headwinds, including new US-China tariffs that took effect after Q2. The company has begun mitigation efforts, though their full impact won't be visible until future quarters. Meanwhile, global antitrust scrutiny of Apple's App Store practices remains an ongoing regulatory risk.

UBS maintained its Neutral rating and $210 price target, reflecting cautious optimism about Apple's diversified revenue streams amid smartphone market softness. As one trader put it: "They're not just an iPhone company anymore—but they're not not an iPhone company either."