Apple designs and sells consumer electronics, software, and services, with iPhone as the dominant product at roughly 47% of revenue. iPhone is a smartphone that serves as the central device in customers' daily lives, used for communication, photography, entertainment, productivity, and payments. Apple also sells Mac computers, iPad tablets, and wearables (primarily Apple Watch and AirPods). Apple sells directly to consumers through its own retail stores and website, and indirectly through carriers, distributors, and third-party retailers, with direct channels accounting for roughly 40% of sales. Apple's business model has two distinct revenue streams: hardware products, which carry mid-30% gross margins, and Services, which runs at roughly 75% gross margins. Services — which crossed $100B in annual revenue in FY25 — includes App Store commissions, a revenue-sharing arrangement with Google for default search on Safari, subscriptions (iCloud, Apple TV+, Apple Music, Apple Arcade), Apple Pay, and advertising. The interplay between these two streams is central to Apple's model: hardware sales build the installed base, and the installed base drives Services engagement and revenue. Apple estimates its active installed base exceeded 2.35B devices. Apple's blended gross margin is approximately 47%. The business is highly seasonal, with the December quarter the largest. Apple is investing heavily in Apple Intelligence, its on-device-first AI system, which management views as a key driver of future iPhone upgrade cycles. Apple returns substantial cash to shareholders through buybacks and dividends, targeting net cash neutral over time.