Apple’s latest quarterly report shows Wearables, Home and Accessories revenue holding steady at $9 billion, roughly the same as last year.
On paper, that looks like stagnation, but CFO Kevan Parekh revealed an interesting detail: over half of all Apple Watch buyers last quarter were new to the product.
The company also hit an all-time high for its Apple Watch install base and recorded a September-quarter record for upgraders.
That’s a big deal in a mature smartwatch market. After a decade on sale, most brands see upgrades rather than conversions.
Apple, however, is growing the Watch’s audience (not just its sales), proving the wearable has moved beyond the tech-savvy early adopters.
When fitness met medicine
CEO Tim Cook credited the surge to the newest lineup, which includes the Apple Watch Ultra 3, Series 11, and Apple Watch SE 3, as well as two new AI-powered health features.
Hypertension notifications can warn users of high blood pressure risk using machine learning models, while SleepScore breaks down nightly rest into simple, actionable insights.
Cook said Apple expects that hypertension alerts alone could help over a million people, underlining how the wearable is shifting from a fitness tracker to an early-warning health tool.
The Ultra 3 adds Apple’s largest display yet, better battery life, and emergency SOS via satellite for remote safety.
The Series 11 refines everyday usability, and the SE 3 makes Apple’s health features more affordable, a key factor in converting first-time buyers.
The ecosystem effect
Apple’s total company revenue for Q4 reached $102.5 billion, up 8% year-on-year, with record iPhone sales of $49 billion and an all-time high of $28.8 billion for Services.
The company’s gross margin climbed to 47.2%, above guidance, helped by strong iPhone and Mac sales and a favourable product mix.
While the Wearables category stayed flat, Cook noted that both Apple Watch and AirPods, including the latest Apple AirPods Pro 3, reached record active-user numbers.
High customer satisfaction – 95% in the U.S., according to Apple – points to an exceptionally loyal base that continues to expand through ecosystem pull.
Behind the scenes, Apple is ploughing those profits into AI. Cook and Parekh confirmed significant investment in Apple Intelligence, on-device and private-cloud features that make Siri and the Apple Watch more personal and predictive.
As Cook put it, the company is “bringing intelligence to more of what people already love.” So while wearables revenue didn’t grow, Apple’s reach did.
More people than ever are using an Apple Watch, Apple’s health tools are becoming more advanced, and the brand’s AI plans suggest the Watch will only become more integral to daily life.
Quietly, the world’s most popular smartwatch is redefining what success looks like for Apple.
