Apple Wants to Build an AI Robot

Last month, Apple (Nasdaq: AAPL) reported its quarterly earnings that outpaced all market expectations. As tariff policy remains undecided, consumers appear to be rushing to buy Apple products before the new rates kick in.

Apple’s Financials

Apple’s third quarter revenues grew 10% to $94 billion, making it the biggest increase since December 2021. Analysts were looking for revenues of $89.53 billion. EPS of $1.57 was also ahead of the Street’s forecast of $1.43. Apple believes that 1% year on year growth was driven by customers buying more products to beat the rising tariffs.

The growth in revenues was driven by iPhone sales which grew 13% over the year to $44.6 billion compared with $40.2 billion anticipated by the market. Mac sales rose 15% to $8.05 billion, ahead of the estimate of $7.3 billion. iPad sales were down 8% to $6.6 billion, missing the Street’s outlook of $7.2 billion. Apple’s Services revenues grew 13% to $27.4 billion ahead of the market’s outlook of $26.8 billion. Apple’s wearables division revenues fell 9% to $7.4 billion and missed the analyst estimates of $7.8 billion.

During the quarter, Apple incurred $800 million in tariff costs compared with the $900 million estimate that it had provided earlier in the year. For the September quarter, Apple estimates $1.1 billion in tariff costs.

Apple did not provide an outlook for the third quarter. The market estimates fourth-quarter revenues of $96.43 billion with an EPS of $1.61.

Apple’s AI Focus

Apple continues to invest in its AI strategy. It has already released over 20 Apple Intelligence features, including visual intelligence, cleanup, and writing tools. Earlier this summer, it released features like Live Translation that has been integrated into Messages, FaceTime, and Phone to allow users to communicate across languages when messaging or speaking; Image Playground and Genmoji allow users with even more ways to express themselves; Visual intelligence to help users learn about objects and places around them using their iPhone camera and content on their phone screen. 

It is also working on leveraging AI to make Siri more personalized to the user. These features are expected to be released next year. But the big news recently has been how Apple wants to use AI in new smart home devices that could include a tabletop robot, home security cameras, and a smart speaker with a screen. According to market reports, Apple is developing a tabletop robot that would look like an iPad mounted to an arm that can move around and follow users as they move around a room. Apple has shared a preview of the product. Expected to be launched in 2027, this robot is expected to be a more 3D version of Siri. It will allow users to have natural language conversations with themselves.

By mid-next year, Apple plans to launch a smart home display that will let users control their smart home technology, play music, take notes, and conduct video calls through a single platform. The device is also expected to leverage the upgraded version of Siri. And while Apple has not commented on how it will use AI for content development, given that Netflix and Amazon are already leveraging AI for their streaming content, Apple won’t be too far behind.

Additionally, Apple is also looking to manage tariff issues by increasing production in the US. It has already committed to an investment of $600 billion over the next four years in the country. Through the American Manufacturing Program (AMP), Apple plans to bring more of its supply chain and advanced manufacturing to the US. It will increase its investment across America and incentivize companies to manufacture critical components in the country.

As part of this focus, earlier this month it announced that 100% of iPhone and Apple Watch cover glass would be manufactured in Kentucky through a partnership with Corning. It also a commitment with MP Materials, the only fully integrated rare earth producer in the US. As part of the deal, Apple would acquire American-made rare earth magnets developed at MP Materials’ facility in Fort Worth, Texas and work together to establish a rare earth recycling line in California.

Apple’s stock is trading at $232.78 with a market capitalization of $3.45 trillion. It touched a 52-week low of $169.21 in April 2025 and climbed to a 52-week high of $260.10 in December 2024.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company.

Photo Credit: Declan Sun on Unsplash