Between 2024 and 2025, Apple got tripped up by two problems of its own making — an AI (Siri) promise it couldn't deliver on schedule, and mounting regulatory losses in Europe and the U.S. — then spent 2026 recovering on both fronts almost simultaneously, in results and in tone.
The story
2023: a quiet run-up
In late 2023, Apple was in a relatively calm stretch, riding anticipation for the iPhone 15 and the upcoming Vision Pro. The legal risks flagged in that year's 10-K were routine — an Epic Games appeal trending in Apple's favor, and a patent dispute with Masimo over the Apple Watch's blood-oxygen sensor. The first crack appeared quietly: on the January 2024 earnings call, management acknowledged that mainland China iPhone revenue had fallen by a mid-single-digit percentage on a currency-neutral basis.
The turn: an AI promise that slipped
Then, at WWDC in June 2024, Apple rebuilt its entire forward narrative around "Apple Intelligence." That year's 10-K (FY2024) listed the product by name for the first time, and management repeatedly promised a "more personal, conversational Siri" was coming "in the coming months." That promise broke publicly for the first time on the May 2025 earnings call. Tim Cook admitted: "we need more time to complete our work on these features so they meet our high-quality bar." Over at least three subsequent calls (FY25 Q2 through Q4, and FY26 Q1), analysts kept asking versions of the same question — was the delay an organizational problem, a legacy-software problem, or an R&D problem.
Regulatory losses pile up
Regulatory risk turned real at almost the same time. The FY2024 10-K described the EU's Digital Markets Act investigation as still pending. The FY2025 10-K reported the outcome: "the Commission fined the Company €500 million... and issued a cease and desist order requiring the Company to remove technical and commercial restrictions." The Epic Games case escalated just as sharply — from "implemented a plan to comply with the injunction" (FY2024) to "the Court found the Company to be in violation of the 2021 Injunction... referred the Company to the U.S. Attorney... for a determination whether criminal contempt proceedings are appropriate" (FY2025).
The response: hedging in the filings, not in the numbers
Tariff language shifted in the same filing cycle. FY2023 and FY2024 10-Ks described tariffs conditionally — "tensions... have in the past led to tariffs." The FY2025 10-K added an entirely new subsection, "Tariffs and Other Measures," written in the present tense: "Beginning in the second quarter of 2025, new U.S. Tariffs were announced..." On the May 2025 call, management quantified the tariff cost for the first time at roughly $900 million for the quarter; that figure grew to $1.1 billion, then $1.4 billion, in the following quarters. Curiously, right as this risk peaked (FY25 Q2, the low point in management's tone), the gap between guidance and actual results started widening in Apple's favor — guidance calling for low-to-mid single-digit growth was met instead with 8–17% actual growth, quarter after quarter — reading like the company had padded its guidance generously for tariff and regulatory uncertainty.
Where it stands now
By January 2026, revenue grew 16% against a 10–12% guide, and Greater China — after two years of decline — grew 38%, delivering what Apple called its best iPhone quarter ever. Then, at WWDC in June 2026, Apple relaunched the delayed feature as "Siri AI." The tone was completely different this time: one earnings call alone mentioned "Siri" 14 times, with management repeating words like "completely rebuilt," "an incredible response," and "we are beyond excited."
Guidance vs. actual results, 11 straight quarters
| Quarter | Guidance | Actual | Result |
|---|---|---|---|
| Q4 FY23 | "Similar to prior year" | $119.6B, +2% | Slight beat |
| Q1 FY24 | "Similar to prior year" (adjusted) | $90.8B, -4.3% | As explained |
| Q2 FY24 | Low single-digit growth | $85.8B, +5% | Beat |
| Q3 FY24 | "Similar pace to June quarter" | $94.9B, +6% | Met/slight beat |
| Q4 FY24 | Low-to-mid single-digit growth | $124.3B, +4% | Met |
| Q1 FY25 | Low-to-mid single-digit growth | $95.4B, +5% | Beat high end |
| Q2 FY25 | Low-to-mid single-digit ($900M tariff impact) | $94.0B, +10% | Big beat |
| Q3 FY25 | Mid-to-high single-digit ($1.1B tariff) | $102.5B, +8% | Met |
| Q4 FY25 | +10–12% ("best quarter ever expected") | $143.8B, +16% | Big beat |
| Q1 FY26 | +13–16% (supply constraints noted) | $111.2B, +17% | Above high end |
| Q2 FY26 | +14–17% | $109.4B, +16% | Met |
Eleven guided quarters, eleven met-or-beaten — a perfect record, with zero misses. The pattern is textbook conservative guidance, but the gap widened noticeably starting Q2 FY2025 — right when tariff uncertainty first got baked into the outlook — suggesting management began guiding more conservatively specifically to buffer against tariff and regulatory risk.
Source: CFO guidance commentary (Luca Maestri through FY2024, Kevan Parekh from FY2025) on each earnings call, checked against the following quarter's reported net sales; 10-Q Q2 FY2024 for one cross-check.
Timeline
- Nov 2023Q4 FY2023 earnings: calm period ahead of iPhone 15 and Vision Pro. China slowdown not yet a major theme.
- Jun 2024WWDC: "Apple Intelligence" unveiled. A "more personal Siri" promised for "the coming months."
- Mar 2024DOJ antitrust suit filed over smartphone-market dominance; EU opens its own DMA investigation — both appear in the FY2024 10-K for the first time.
- Apr 2025EU Commission fines Apple €500 million and issues a cease-and-desist order. Separately, a U.S. court finds Apple in violation of the 2021 Epic injunction and refers the matter for potential criminal contempt proceedings.
- May 2025Q2 FY2025 earnings: Siri delay confirmed publicly ("we need more time"). Tariff costs quantified for the first time ($900M). Lowest tone score of the period.
- Oct 2025FY2025 10-K filed: new "Tariffs and Other Measures" section added. Annual revenue hits a record $416.1B.
- Jan 2026Q1 FY2026 earnings: 16% growth against a 10–12% guide. Greater China revenue up 38%.
- Jun–Jul 2026WWDC and Q3 FY2026 earnings: "Siri AI" unveiled, "completely rebuilt." Tone score hits its high point of the period.
Our read
The real story of these three years is two self-inflicted wounds — a missed AI deadline and a wave of regulatory losses — landing at nearly the same time, followed by a recovery that arrived on both fronts almost together. Whether that recovery reflects a durable structural improvement, or simply an iPhone 17 supercycle overlapping with pent-up demand, isn't something these filings alone can settle. The tariff cost line is still growing quarter over quarter, and the EU's second DMA investigation (Article 6(4)) hadn't reached a final conclusion as of the FY2025 10-K — both are worth re-checking in the next filing or two.
What we still don't know
- Why the Masimo patent dispute disappeared from Apple's filings after FY2023 — settlement, resolution, or simply no longer material — isn't confirmed anywhere in the record we reviewed.
- The EU's second DMA investigation (Article 6(4)) had only reached a preliminary finding as of the FY2025 10-K; the final outcome and any additional fines need the next 10-K or 10-Q to confirm.
- Whether the FY2026 rebound is a temporary iPhone 17 supercycle effect or a structural improvement (including Siri AI) will need another quarter or two of results to judge.
- Why quarterly tariff costs kept climbing ($900M → $1.1B → $1.4B) and when that trend levels off isn't something these filings answer.
Frequently asked questions
Why was Apple's Siri AI promise delayed?
Apple promised an upgraded, more conversational Siri on a timeline it ultimately couldn't deliver on schedule — one of two self-inflicted problems, alongside mounting regulatory losses in Europe and the U.S., that defined its 2024–2025 stretch.
Has Apple recovered from its 2024–2025 setbacks?
Largely yes — Apple spent 2026 recovering on both fronts almost simultaneously, with results and management tone both improving together.
What sources does this analysis draw from?
This piece is built from Apple's 10-K filings for FY2023 through FY2025 and 12 quarters of earnings call transcripts from November 2023 to July 2026.