Apple is riding a wave of euphoria these days, bolstered by the healthy demand for the new iPhone 17 lineup. Even so, Goldman Sachs has now flagged some key concerns apropos the Cupertino giant’s App Store moat and the sustainability of iPhone demand trends.
Goldman Sachs sees strong growth ahead for Apple, with the resulting optimism moderated by a few emerging risks
Goldman Sachs analyst Michael Ng has penned an insightful note today on the demand dynamics surrounding Apple’s iPhone 17 lineup and services segment.
The key takeaways from the note include:
- Goldman Sachs expects Apple’s products segment to show year-over-year revenue growth of 10 percent in its upcoming earnings for the fiscal fourth quarter of 2025, with Macs showing a revenue growth of 12 percent year-over-year.
- Apple is likely to have borne $1.1 billion in tariff-related costs in its fiscal Q4 2025, which would lower its gross margin to 46.5 percent.
- Apple’s services segment is expected to show year-over-year growth of 13 percent, despite “weakening App Store spending trends,” as “momentum across iCloud+, TAC, AppleCare+, Apple Pay, and other subscription services” compensates.
- Goldman sees the iPhone 17 lineup enjoying strong momentum into Apple’s fiscal year 2026 (which commenced in October 2025), “supported by both US carrier competition and continued form factor changes with the expected launch of the iPhone 18 foldable.”
However, Goldman Sachs did flag 2 key risks for Apple:
- The sustainability of iPhone demand, given the potential for demand pull-in during FY 2025 due to trade policy uncertainty.
- Risks to App Store revenue growth due to third-party payment options.
As to the last point, we noted recently that Apple’s App Store was now caught in China’s regulatory crosshairs following an antitrust complaint, which alleges that Apple maintains a monopoly over app distributions and payment methods in China while allowing off-App Store payments as well as third-party app stores in other markets.
In the EU, Apple allows users to install third-party app stores on their devices, in compliance with the EU’s Digital Markets Act.
In the US, Apple was recently compelled by a court in the Epic case to allow access to external payment methods and to enable the return of Epic’s Fortnite app. While the Cupertino giant has complied with the verdict, it still vows to charge a commission on those payments, prompting the judge in the case to call on Apple to cease doing so or face contempt proceedings and even possible criminal charges.
This situation has created a legal precedent, where consumers in other markets are also asking for similar privileges. For instance, in Australia, Epic recently asked the court to allow its apps to be sideloaded onto Apple devices without any associated commission.
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Source: wccftech.com
