President Donald Trump’s family business is entering a new market: mobile phones.
This initiative, led by the president’s sons Eric Trump and Donald Trump Jr., will feature a made-in-the-USA phone retailing for $499 and a mobile phone service priced at $47.45 a month, a reference to Trump’s terms as the 45th and 47th president. Trump Mobile, which will be operated by T1 Mobile LLC, also promises to run U.S.-based call centers for customer support.
“Hard-working Americans deserve a wireless service that’s affordable, reflects their values, and delivers reliable quality they can count on,” Eric Trump said in a statement.
So, where does this leave Apple (AAPL)? Is the Trump family’s entrance into the mobile phone market a cause for concern for AAPL investors?
Make no mistake, Apple has problems, and some of them are Trump-centric. The president made his displeasure particularly clear with Apple’s plans to move production of most of the iPhones used in the United States to India, remarking about CEO Tim Cook, “I said to him, ‘my friend, I treated you very good. You’re coming here with $500 billion, but now I hear you’re building all over India.’ I don’t want you building in India.”
Apple has pledged to invest $500 billion across the United States over the coming four years, including through building an advanced server manufacturing hub in Texas. These initiatives are expected to help mitigate Apple’s exposure to tariffs while simultaneously generating political goodwill through localized production.
At the same time, Apple has stepped up its efforts to diversify its manufacturing footprint. As of the second quarter of its fiscal 2025, around half of the iPhones intended for U.S. consumers are now assembled in India, which is an outcome of a notable strategic shift. In addition, a substantial share of iPads, Macs, Apple Watches, and AirPods for the American market are now manufactured in Vietnam.
As for the potential challenge posed by Trump Mobile, Apple appears well-insulated. With a global installed base of more than 2 billion active devices, a brand identity that is unrivaled in the tech world, and a deeply integrated ecosystem that creates substantial user lock-in, it is hard to envision a scenario where a nascent competitor like T1 Mobile poses any meaningful disruption.
Apple’s Services division, in particular, has served as a bright spot in an otherwise uncertain environment, helping buffer the company from headwinds such as geopolitical tensions and a maturing hardware market. With 1 billion active paid subscriptions, this segment continues to deliver dependable revenue streams. It includes high-margin components like the App Store, Apple Music, Apple TV+, iCloud services, Apple Pay, and lucrative licensing deals, notably its multibillion-dollar agreement with Google (GOOGL) for default search placement on Safari.
What makes the Services business especially compelling is its profitability. In Q2, it posted a gross margin of 75.7%, well ahead of the 35.9% gross margin seen in the Products division. This margin advantage underscores the scalable nature of digital services, where additional user acquisition adds minimal incremental costs once the infrastructure is established.
Moreover, as discussed in my prior analysis, Apple is making deliberate moves to broaden accessibility to its devices by appealing to more cost-conscious consumers while also exploring radical design changes for the iPhone’s next iteration.
In light of these factors, even with ongoing debates around Apple’s pace of innovation and exposure to tariffs, it is difficult to see how the unreleased Trump T1 Mobile would pose any credible threat to the iPhone’s dominance.
Apple’s fundamentals should also give investors confidence here.
Apple has a market cap of $2.96 trillion and 10-year revenue and earnings compound annual growth rates of 6.56% and 7.36%, respectively. Although the stock is down 21.9% on a YTD basis, its shares are up more than 500% over the past decade and nearly 125% over the past five years.
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In line with its well-established pattern, Apple once again delivered quarterly results that outperformed Wall Street projections. The tech giant reported total revenue of $95.4 billion for Q2 2025, reflecting a 5.1% increase from the same period last year. Gross margin also improved, rising to 47.1% compared to 46.6% a year earlier. Revenue from the Products division saw a slight year-over-year uptick of 2.7%, totaling $68.7 billion, whereas the company’s Services arm continued its strong growth trajectory with an 11.6% increase, bringing in $26.6 billion.
Earnings per share reached $1.65, representing a 7.8% rise from the previous year and surpassing analysts’ average forecast of $1.62.
Apple ended the quarter in a strong financial position, holding $28.2 billion in cash, a figure comfortably above its short-term liabilities of approximately $6 billion.
Further reinforcing its commitment to shareholder returns, the company also revealed a new $100 billion stock repurchase authorization alongside a 4% boost in its quarterly dividend, now set at $0.26 per share.
However, beyond the earlier-mentioned tariff-related issues, another pressing concern weighing on Apple’s stock trajectory has been its comparatively subdued performance in artificial intelligence. Despite the company’s progress in mitigating supply chain vulnerabilities, its approach to AI has not resonated as strongly with investors as some had hoped.
Apple’s unveiling of its AI suite, branded as “Apple Intelligence” during WWDC 2024, arrived with much anticipation but failed to sustain interest. The buzz surrounding the announcement quickly dissipated, largely due to its limited compatibility (available only on newer models starting with the iPhone 15 Pro) thereby leaving a sizable segment of its user base excluded. The delay of the enhanced Siri, now postponed until spring 2026, only adds to growing frustrations. Legal hurdles have also emerged, with lawsuits now pending that accuse the company of misleading advertising practices and anti-competitive behavior.
Further, expectations were also dampened following WWDC 2025, where the keynote failed to inject fresh energy into Apple’s AI narrative. While the introduction of a redesigned interface dubbed “Liquid Glass” drew attention, many critics saw it as more of a visual upgrade than a meaningful leap in functionality. Moreover, the broader presentation lacked the kind of bold AI vision that competitors have recently demonstrated. Google, for example, showcased its advanced Veo 3 model during I/O just weeks earlier, reinforcing the perception that Apple is trailing in this space.
That said, one potentially transformative step was the company’s move to open its proprietary Apple Intelligence model to third-party developers. This could, in time, promote broader AI integration across its product suite, spanning hardware and services alike. Still, the payoff from this strategy is unlikely to be immediate. And with competitors rapidly accelerating AI deployment, Apple may be running short on time to reassert leadership in the next wave of consumer tech innovation.
Considering all this, analysts have earmarked a rating of “Moderate Buy” for Apple stock with a mean target price of $230.75. This indicates upside potential of about 18% from current levels. Out of 37 analysts covering the stock, 18 have a “Strong Buy” rating, three have a “Moderate Buy” rating, 13 have a “Hold” rating, one has a “Moderate Sell” rating, and two have a “Strong Sell” rating.
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On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
