Apple's Record Upgrade Rates Driven by Innovation and Market Expansion in Q3 2025

Key Drivers Behind Record Upgrade Rates for iPhone, Mac, and Apple Watch in Q3 2025

Apple's record upgrade rates for the iPhone, Mac, and Apple Watch during the June quarter of fiscal 2025 were driven by several interrelated factors:

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1. Strong Product Lineups and Innovation

• iPhone 16 Family: The iPhone 16 lineup, including the recently introduced iPhone 16e, showed strong double-digit growth compared to the iPhone 15 family. The new models feature powerhouse components like the A18 Pro chip, innovative Pro camera features, breakthrough battery life, and a 2-in-1 camera system, making the product highly compelling for upgraders.
• Mac Portfolio: The Mac segment saw strength largely driven by the M4 MacBook Air, which is the world’s most popular laptop, offering a new level of performance. The MacBook Pro continues to attract customers with its power and longest battery life ever on a Mac. The Mac Studio and Mac mini also contributed with powerful performance and compact design.
• Apple Watch: The Apple Watch installed base reached a new all-time high, with over half of the customers purchasing being new to the product. The watchOS 26 update brings smarter workout apps, Smart Stack, and a fresh design, enhancing the user experience.

2. Expanding Installed Base and Geographic Growth

• Apple reported all-time highs in active installed bases for iPhone, Mac, and Apple Watch across all geographic segments.
• There was broad-based growth in every geographic segment, including double-digit growth in emerging markets such as India, the Middle East, South Asia, Brazil, Europe, Greater China, and the rest of Asia Pacific.
• In Mainland China, iPhone upgraders set a June quarter record, and the MacBook Air and Mac mini were the top-selling laptop and desktop models respectively.

3. High Customer Satisfaction and Loyalty

• Customer satisfaction remains very high, with 98% for iPhone and iPad, and 97% for Mac and Apple Watch in the U.S., supporting strong loyalty and upgrade intent.

4. Software and AI Enhancements

• The upcoming iOS 26, macOS 26, and watchOS 26 updates introduce meaningful new features such as real-time call screening, smarter messaging, live translation, spatial widgets, and enhanced AI-driven experiences under the Apple Intelligence umbrella.
• Apple’s significant investment in AI and integration of AI features across devices enhance the user experience, making upgrades more attractive.

5. Limited Impact of Pull-Forward Demand and Tariffs

• There was a modest pull-forward of demand estimated at about 1 percentage point of the 10% total company growth, primarily in April, related to tariff discussions.
• Tariff-related costs were noted but did not materially dampen upgrade demand.

6. New Customer Acquisition

• For Mac, iPad, and Apple Watch, a significant portion of buyers were new to the product category, indicating expansion of the user base alongside upgrades.

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Summary

The record upgrade rates for iPhone, Mac, and Apple Watch in the quarter were primarily driven by the strength and innovation of the latest product lineups, broad geographic expansion including emerging markets, high customer satisfaction, and enhanced software and AI features. These factors combined with a growing installed base and new customer acquisition created a compelling environment for upgrades, resulting in June quarter records across these product categories.