Apple’s services segment, where Apple TV resides, showed accelerated momentum in late 2025, with total hours viewed in December jumping 36% year-over-year and eclipsing all prior monthly engagement records. This surge reflects the impact of strategic initiatives such as the Apple One bundle—which combines Apple TV with up to five other services at a discounted rate—and marquee content deals like its exclusive five-year Formula 1 partnership. With services gross margins near 75% versus roughly 36% for hardware sales, continued growth in Apple TV subscriptions could meaningfully bolster Apple’s overall profitability. Investors should monitor quarterly engagement updates and any subscriber metrics Apple begins to disclose alongside its regular services-revenue reporting.

After more than a decade as the anchor client dictating capacity and pricing across chip foundries, substrate makers, and memory suppliers, Apple is ceding influence to AI and hyperscale cloud customers. At TSMC, high-performance computing now contributes about 58% of sales—surpassing smartphone-processor revenue—and memory producers are reallocating DRAM capacity toward AI data centers, driving up component costs for smartphones. Even glass-cloth substrate suppliers are prioritizing AI chipmakers under long-term contracts. While Apple remains a massive purchaser, its ability to secure preferential pricing and guaranteed capacity is eroding, potentially pressuring margins unless the company adapts its procurement strategy or passes higher costs onto end consumers.