iPhoneWide moat

Apple (AAPL) — moat facet

The account every other line sells into: $209.6 billion in fiscal 2025, flat for years, then up 22% in fiscal 2026 and now $100 dearer on every model.

The iPhone is half of Apple and the reason for most of the rest. It brought in $209.6 billion in fiscal 2025, 50% of net sales1, and $196.5 billion in just the first nine months of fiscal 2026, up 22%2. Every other line sells to people who already own one: the Watch pairs with it, the Mac hands off to it, and the Services meter runs on a base of active devices that passed 2.5 billion in January 20263.

iPhone net sales by quarter ($B)69.7Q1'2446.0Q239.3Q346.2Q469.1Q1'2546.8Q244.6Q349.0Q485.3Q1'2657.0Q254.3Q3Apple 10-Qs; Q4 = fiscal year (10-K) less nine months
Every quarter of fiscal 2026 beat its year-earlier match by more than 21%, and the December quarter was the line's best ever.

The line is simpler than the rest of Apple: smartphones running iOS, from the iPhone 16e to the iPhone 17 Pro in the fiscal 2025 line-up4, and since September 2026 the foldable iPhone Duo. Apple introduced the first iPhone in January 20075. By fiscal 2015 it brought in $155.0 billion, two-thirds of the company6.

The line is paid for once per device, and Apple no longer says how many devices. It reported units until fiscal 2018, and those years show the pricing power directly: revenue per iPhone went from $607 in fiscal 2013 to $766 in fiscal 2018, and in that last year units rose less than 1% while revenue rose 18%7. Counterpoint put Apple's average selling price at about $946 in the second quarter of 20268, and in September 2026 Apple raised the starting price of every iPhone by $100, from the $699 iPhone 17e to the $1,299 Pro Max, and began offering leases9. Most phones reach customers through carriers and other resellers, the indirect channel that took 60% of Apple's net sales in fiscal 202510.

Profitability is the gap in the disclosure. Apple reports a products gross margin, 36.8% in fiscal 202511 and 40.1% in the June 2026 quarter with about two and a half points of tariff refunds12, but it does not split it by product. The iPhone is 68% of product revenue, so it must carry a large share of that margin, and the rising price per unit suggests it earns above the products average; that is inference, not a filed number.

Growth has come in bursts separated by flat stretches. The series runs $155.0 billion in fiscal 2015, $136.7 billion, $141.3 billion and $166.7 billion as originally reported for fiscal 201813, then on the recast basis $142.4 billion in fiscal 2019, $137.8 billion, $192.0 billion, $205.5 billion, $200.6 billion, $201.2 billion and $209.6 billion1415. From fiscal 2019 to fiscal 2025 that is about 6.7% a year compounded16, and almost all of it arrived in fiscal 2021, when new models launched in the first and fourth quarters lifted sales 39%17. The weak years have plain causes in the filings: fiscal 2016 fell on a lower rate of upgrades and fiscal 2019 on lower unit sales1819; fiscal 2020 had no new model in its fourth quarter20; fiscal 2023 fell 2% as non-Pro models sold less21.

Fiscal 2026 broke the pattern. The December 2025 quarter was the iPhone's best ever22, and sales then rose 22% in both the March and June quarters, to $57.0 billion and $54.3 billion, on higher sales of Pro models2324. Apple said the June quarter set a record for upgraders and that iPhone was the top-selling model in the United States, urban China, the UK, France, Australia and Japan25. Greater China, where the iPhone is a larger share of Apple's sales than elsewhere, grew 38%, 28% and 22% in the first three quarters of the year26.

The outlook is guided and unusually specific. Apple told investors to expect iPhone revenue up in the mid-teens in the September quarter, held back by supply constraints and currency27, and it has three things pulling the same way: the price rise on every model, the $1,999 Duo shipping from 23 October28, and a rebuilt Siri that gives owners of older phones a reason to move. Against them sit memory costs, which Tim Cook said Apple expects to keep rising29, and the plain risk that a higher price on a replacement product stretches the replacement cycle.

The rivalries are covered under Competitors; what matters here is whether this growth is a new level or a pulled-forward cycle. The quarter that will settle it is the one to December 2026. If iPhone revenue grows there, against the best quarter in the line's history and after a $100 price rise, demand absorbed the price; if it falls, fiscal 2026 borrowed from fiscal 2027.

Moat trajectory: Widening

Revenue rose 22% in each of the March and June 2026 quarters on Pro models, the December quarter was the line's best ever, and Apple raised every iPhone's price by $100 in September. The test is whether demand holds after the price rise.

The number that tests this moat
Reported
iPhone net sales, first nine months of FY2026
$196,515M, +22% year on year

The line grew 22% in each of the last two quarters on Pro models. The December 2026 quarter, the first after a $100 price rise on every model, will show whether demand absorbed the price.

Source: Apple Form 10-Q, Q3 FY2026 ↗
References
  1. ReportedIt brought in $209.6 billion in fiscal 2025, 50% of net sales, and $196.5 billion in just the first nine months of fiscal 2026, up 22%.
    Apple Form 10-K, FY2025, Item 7 - net sales by category 2023-2025 (iPhone $209,586M / $201,183M / $200,583M; Mac $33,708M / $29,984M / $29,357M; iPad $28,023M / $26,694M / $28,300M; Wearables, Home and Accessories $35,686M / $37,005M / $39,845M; Services $109,158M / $96,169M / $85,200M) and the drivers of each change; products and services gross margin 36.8% and 75.4%; services cost of sales $26,844M — FY2023-FY2025 · publ. 31 October 2025 · source ↗
  2. ReportedIt brought in $209.6 billion in fiscal 2025, 50% of net sales, and $196.5 billion in just the first nine months of fiscal 2026, up 22%.
    Apple Form 10-Q, quarter ended 27 June 2026 - iPhone $54,252M (+22%); Mac $10,352M (+29%); iPad $6,191M (-6%) on iPad mini and Air; Wearables $7,883M (+6%); Services $30,739M (+12%) on advertising and cloud services; nine months: iPhone $196,515M, Mac $27,137M, iPad $21,700M, Wearables $27,277M, Services $91,728M; services gross margin 75.6%; deferred revenue $14.9B, 64% within a year — Q3 FY2026 · publ. 31 July 2026 · source ↗
  3. ReportedEvery other line sells to people who already own one: the Watch pairs with it, the Mac hands off to it, and the Services meter runs on a base of active devices that passed 2.5 billion in January 2026.
    Apple Q1 FY2026 results release (Form 8-K, exhibit 99.1) — revenue $143.8B, up 16%; 'our installed base now has more than 2.5 billion active devices' — Quarter ended 27 December 2025 · publ. 29 January 2026 · source ↗
  4. ReportedThe line is simpler than the rest of Apple: smartphones running iOS, from the iPhone 16e to the iPhone 17 Pro in the fiscal 2025 line-up, and since September 2026 the foldable iPhone Duo.
    Apple Form 10-K, FY2025, Item 1 - the iPhone, Mac, iPad and Wearables, Home and Accessories lines (wearables include smartwatches, wireless headphones and spatial computers); Services: advertising incl. third-party licensing arrangements, AppleCare, cloud services, digital content incl. the App Store and subscription services, payment services; reportable segments are geographic; direct and indirect channels 40% and 60% of net sales — FY2025 · publ. 31 October 2025 · source ↗
  5. ReportedApple introduced the first iPhone in January 2007.
    Apple press release, 'Apple Reinvents the Phone with iPhone' (9 January 2007) — January 2007 · publ. 9 January 2007 · source ↗
  6. ReportedBy fiscal 2015 it brought in $155.0 billion, two-thirds of the company.
    Apple Form 10-K, FY2015 - net sales and unit sales by product FY2013-FY2015 (iPhone $155,041M; iPad $23,227M on 54,856K units, and $31,980M on 71,033K in 2013; Mac $25,471M, $21,483M on 16,341K in 2013; Services $19,909M; Other Products $10,067M) — FY2013-FY2015 · publ. 28 October 2015 · source ↗
  7. Moat Explorer calcIt reported units until fiscal 2018, and those years show the pricing power directly: revenue per iPhone went from $607 in fiscal 2013 to $766 in fiscal 2018, and in that last year units rose less than 1% while revenue rose 18%.
    Moat Explorer calc from Apple Forms 10-K (FY2015-FY2025) and 10-Q (FY2026): category net sales, units to FY2018, products and services gross margin, installed base reported each January — FY2013 to June 2026 · publ. 2026-09-19 · source ↗
    Method: iPhone net sales / units: $91,279M / 150,257K = $607 (FY2013); $166,699M / 217,722K = $766 (FY2018); FY2018 units +0.4% (217,722K / 216,756K) and net sales +18% ($166,699M / $141,319M).
  8. Third-party estimateCounterpoint put Apple's average selling price at about $946 in the second quarter of 2026, and in September 2026 Apple raised the starting price of every iPhone by $100, from the $699 iPhone 17e to the $1,299 Pro Max, and began offering leases.
    Counterpoint Research via BigGo Finance — Apple took 49% of global smartphone revenue in Q2 2026 on a 21% shipment share (17% a year earlier), with an average selling price of $946 — Q2 2026 · publ. August 2026 · source ↗
  9. ReportedCounterpoint put Apple's average selling price at about $946 in the second quarter of 2026, and in September 2026 Apple raised the starting price of every iPhone by $100, from the $699 iPhone 17e to the $1,299 Pro Max, and began offering leases.
    CNN Business live coverage of Apple's 9 September 2026 event — CEO John Ternus, who took over from Tim Cook earlier in the month, revealed the foldable iPhone Duo, starting at $1,999 and topping out at $3,199; pre-orders from October 16, availability from October 23; iPhone 18 Pro from $1,199 and Pro Max from $1,299 against $1,099 and $1,199 for the iPhone 17 Pro models; older iPhones up $100 (iPhone 17 $899 from $799, 17e $699 from $599); a new leasing plan, Apple Upgrade — 9 September 2026 · publ. 9 September 2026 · source ↗
  10. ReportedMost phones reach customers through carriers and other resellers, the indirect channel that took 60% of Apple's net sales in fiscal 2025.
    Apple Form 10-K, FY2025, Item 1 - the iPhone, Mac, iPad and Wearables, Home and Accessories lines (wearables include smartwatches, wireless headphones and spatial computers); Services: advertising incl. third-party licensing arrangements, AppleCare, cloud services, digital content incl. the App Store and subscription services, payment services; reportable segments are geographic; direct and indirect channels 40% and 60% of net sales — FY2025 · publ. 31 October 2025 · source ↗
  11. ReportedApple reports a products gross margin, 36.8% in fiscal 2025 and 40.1% in the June 2026 quarter with about two and a half points of tariff refunds, but it does not split it by product.
    Apple Form 10-K, FY2025, Item 7 - net sales by category 2023-2025 (iPhone $209,586M / $201,183M / $200,583M; Mac $33,708M / $29,984M / $29,357M; iPad $28,023M / $26,694M / $28,300M; Wearables, Home and Accessories $35,686M / $37,005M / $39,845M; Services $109,158M / $96,169M / $85,200M) and the drivers of each change; products and services gross margin 36.8% and 75.4%; services cost of sales $26,844M — FY2023-FY2025 · publ. 31 October 2025 · source ↗
  12. ReportedApple reports a products gross margin, 36.8% in fiscal 2025 and 40.1% in the June 2026 quarter with about two and a half points of tariff refunds, but it does not split it by product.
    MacRumors live coverage of Apple's Q3 FY2026 call (30 July 2026) — installed base above 2.5 billion; product margin 40.1% with a 2.5-point tariff-refund impact; September-quarter guidance: revenue growth of 9-11%, gross margin 47-48% with about 1% benefit from tariff refunds; Apple introduced a neural engine in 2017 — Q3 FY2026 call · publ. 30 July 2026 · source ↗
  13. ReportedThe series runs $155.0 billion in fiscal 2015, $136.7 billion, $141.3 billion and $166.7 billion as originally reported for fiscal 2018, then on the recast basis $142.4 billion in fiscal 2019, $137.8 billion, $192.0 billion, $205.5 billion, $200.6 billion, $201.2 billion and $209.6 billion.
    Apple Form 10-K, FY2018 - net sales and unit sales by product FY2016-FY2018 as originally reported (iPhone $166,699M on 217,722K units; iPad $18,805M on 43,535K; Mac $25,484M on 18,209K; Other Products $17,417M); iPad ASPs lower on a different mix of iPads — FY2016-FY2018 · publ. 5 November 2018 · source ↗
  14. ReportedThe series runs $155.0 billion in fiscal 2015, $136.7 billion, $141.3 billion and $166.7 billion as originally reported for fiscal 2018, then on the recast basis $142.4 billion in fiscal 2019, $137.8 billion, $192.0 billion, $205.5 billion, $200.6 billion, $201.2 billion and $209.6 billion.
    Apple Form 10-K, FY2021 - net sales by category FY2019-FY2021 (iPhone +39% on new models launched in the first and fourth quarters; Mac +23%; iPad $31,862M, +34% on iPad Air and iPad Pro; Wearables +25%; Services +27%); services gross margin 69.7% — FY2019-FY2021 · publ. 29 October 2021 · source ↗
  15. ReportedThe series runs $155.0 billion in fiscal 2015, $136.7 billion, $141.3 billion and $166.7 billion as originally reported for fiscal 2018, then on the recast basis $142.4 billion in fiscal 2019, $137.8 billion, $192.0 billion, $205.5 billion, $200.6 billion, $201.2 billion and $209.6 billion.
    Apple Form 10-K, FY2025, Item 7 - net sales by category 2023-2025 (iPhone $209,586M / $201,183M / $200,583M; Mac $33,708M / $29,984M / $29,357M; iPad $28,023M / $26,694M / $28,300M; Wearables, Home and Accessories $35,686M / $37,005M / $39,845M; Services $109,158M / $96,169M / $85,200M) and the drivers of each change; products and services gross margin 36.8% and 75.4%; services cost of sales $26,844M — FY2023-FY2025 · publ. 31 October 2025 · source ↗
  16. Moat Explorer calcFrom fiscal 2019 to fiscal 2025 that is about 6.7% a year compounded, and almost all of it arrived in fiscal 2021, when new models launched in the first and fourth quarters lifted sales 39%.
    Moat Explorer calc from Apple Forms 10-K (FY2015-FY2025) and 10-Q (FY2026): category net sales, units to FY2018, products and services gross margin, installed base reported each January — FY2013 to June 2026 · publ. 2026-09-19 · source ↗
    Method: iPhone $142,381M (FY2019) to $209,586M (FY2025): (209,586 / 142,381)^(1/6) - 1 = 6.7%.
  17. ReportedFrom fiscal 2019 to fiscal 2025 that is about 6.7% a year compounded, and almost all of it arrived in fiscal 2021, when new models launched in the first and fourth quarters lifted sales 39%.
    Apple Form 10-K, FY2021 - net sales by category FY2019-FY2021 (iPhone +39% on new models launched in the first and fourth quarters; Mac +23%; iPad $31,862M, +34% on iPad Air and iPad Pro; Wearables +25%; Services +27%); services gross margin 69.7% — FY2019-FY2021 · publ. 29 October 2021 · source ↗
  18. ReportedThe weak years have plain causes in the filings: fiscal 2016 fell on a lower rate of upgrades and fiscal 2019 on lower unit sales; fiscal 2020 had no new model in its fourth quarter; fiscal 2023 fell 2% as non-Pro models sold less.
    Apple Form 10-K, FY2016 - iPhone net sales and unit sales decreased on a lower rate of iPhone upgrades; iPad decreased on lower unit sales and weaker foreign currencies — FY2016 · publ. 26 October 2016 · source ↗
  19. ReportedThe weak years have plain causes in the filings: fiscal 2016 fell on a lower rate of upgrades and fiscal 2019 on lower unit sales; fiscal 2020 had no new model in its fourth quarter; fiscal 2023 fell 2% as non-Pro models sold less.
    Apple Form 10-K, FY2019 - the recast category table (Wearables, Home and Accessories +41% and +36% on AirPods and Apple Watch; iPhone -14% on lower unit sales; Services +16%); gross margin by products and services, services 55.0% (2017) and 63.7% (2019) — FY2017-FY2019 · publ. 31 October 2019 · source ↗
  20. ReportedThe weak years have plain causes in the filings: fiscal 2016 fell on a lower rate of upgrades and fiscal 2019 on lower unit sales; fiscal 2020 had no new model in its fourth quarter; fiscal 2023 fell 2% as non-Pro models sold less.
    Apple Form 10-K, FY2020 - iPhone decreased due primarily to the absence of new iPhone models in the fourth quarter of 2020; Mac +11% on the MacBook Pro — FY2020 · publ. 30 October 2020 · source ↗
  21. ReportedThe weak years have plain causes in the filings: fiscal 2016 fell on a lower rate of upgrades and fiscal 2019 on lower unit sales; fiscal 2020 had no new model in its fourth quarter; fiscal 2023 fell 2% as non-Pro models sold less.
    Apple Form 10-K, FY2023 - iPhone -2% ($4.9B) on non-Pro models; Mac -27% ($10.8B) on laptops; iPad -3% on iPad mini and Air; Wearables, Home and Accessories -3% ($1.4B); Services +9% ($7.1B) across all lines of business — FY2023 · publ. 3 November 2023 · source ↗
  22. ReportedThe December 2025 quarter was the iPhone's best ever, and sales then rose 22% in both the March and June quarters, to $57.0 billion and $54.3 billion, on higher sales of Pro models.
    Apple Q1 FY2026 results release (Form 8-K, exhibit 99.1) — revenue $143.8B, up 16%; 'our installed base now has more than 2.5 billion active devices' — Quarter ended 27 December 2025 · publ. 29 January 2026 · source ↗
  23. ReportedThe December 2025 quarter was the iPhone's best ever, and sales then rose 22% in both the March and June quarters, to $57.0 billion and $54.3 billion, on higher sales of Pro models.
    Apple Form 10-Q, quarter ended 28 March 2026 - iPhone $56,994M (from $46,841M) on Pro models; Mac $8,399M on laptops; iPad $6,914M on the iPad; Wearables $7,901M (from $7,522M); Services $30,976M (from $26,645M) — Q2 FY2026 · publ. 1 May 2026 · source ↗
  24. ReportedThe December 2025 quarter was the iPhone's best ever, and sales then rose 22% in both the March and June quarters, to $57.0 billion and $54.3 billion, on higher sales of Pro models.
    Apple Form 10-Q, quarter ended 27 June 2026 - iPhone $54,252M (+22%); Mac $10,352M (+29%); iPad $6,191M (-6%) on iPad mini and Air; Wearables $7,883M (+6%); Services $30,739M (+12%) on advertising and cloud services; nine months: iPhone $196,515M, Mac $27,137M, iPad $21,700M, Wearables $27,277M, Services $91,728M; services gross margin 75.6%; deferred revenue $14.9B, 64% within a year — Q3 FY2026 · publ. 31 July 2026 · source ↗
  25. ReportedApple said the June quarter set a record for upgraders and that iPhone was the top-selling model in the United States, urban China, the UK, France, Australia and Japan.
    MacRumors live coverage of Apple's Q3 FY2026 call (30 July 2026) — installed base above 2.5 billion; product margin 40.1% with a 2.5-point tariff-refund impact; September-quarter guidance: revenue growth of 9-11%, gross margin 47-48% with about 1% benefit from tariff refunds; Apple introduced a neural engine in 2017 — Q3 FY2026 call · publ. 30 July 2026 · source ↗
  26. ReportedGreater China, where the iPhone is a larger share of Apple's sales than elsewhere, grew 38%, 28% and 22% in the first three quarters of the year.
    Apple Form 10-Q, quarter ended 27 June 2026 - iPhone $54,252M (+22%); Mac $10,352M (+29%); iPad $6,191M (-6%) on iPad mini and Air; Wearables $7,883M (+6%); Services $30,739M (+12%) on advertising and cloud services; nine months: iPhone $196,515M, Mac $27,137M, iPad $21,700M, Wearables $27,277M, Services $91,728M; services gross margin 75.6%; deferred revenue $14.9B, 64% within a year — Q3 FY2026 · publ. 31 July 2026 · source ↗
  27. ReportedApple told investors to expect iPhone revenue up in the mid-teens in the September quarter, held back by supply constraints and currency, and it has three things pulling the same way: the price rise on every model, the $1,999 Duo shipping from 23 October, and a rebuilt Siri that gives owners of older phones a reason to move.
    MacRumors live coverage of Apple's Q3 FY2026 call (30 July 2026) — installed base above 2.5 billion; product margin 40.1% with a 2.5-point tariff-refund impact; September-quarter guidance: revenue growth of 9-11%, gross margin 47-48% with about 1% benefit from tariff refunds; Apple introduced a neural engine in 2017 — Q3 FY2026 call · publ. 30 July 2026 · source ↗
  28. ReportedApple told investors to expect iPhone revenue up in the mid-teens in the September quarter, held back by supply constraints and currency, and it has three things pulling the same way: the price rise on every model, the $1,999 Duo shipping from 23 October, and a rebuilt Siri that gives owners of older phones a reason to move.
    CNN Business live coverage of Apple's 9 September 2026 event — CEO John Ternus, who took over from Tim Cook earlier in the month, revealed the foldable iPhone Duo, starting at $1,999 and topping out at $3,199; pre-orders from October 16, availability from October 23; iPhone 18 Pro from $1,199 and Pro Max from $1,299 against $1,099 and $1,199 for the iPhone 17 Pro models; older iPhones up $100 (iPhone 17 $899 from $799, 17e $699 from $599); a new leasing plan, Apple Upgrade — 9 September 2026 · publ. 9 September 2026 · source ↗
  29. ReportedAgainst them sit memory costs, which Tim Cook said Apple expects to keep rising, and the plain risk that a higher price on a replacement product stretches the replacement cycle.
    CNBC live coverage of Apple's Q3 FY2026 results (30 July 2026) — Services revenue up 12%; Cook said Apple has 1.5 billion paid subscriptions; gross margin guidance of 47%-48%; memory costs rising — Q3 FY2026 · publ. 30 July 2026 · source ↗
Sources
Generated September 19, 2026