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Apple reported a blockbuster quarter for iPhone sales at the end of last year as holiday purchases and a rebound in China helped it beat its already ambitious expectations with a record $144bn in revenue.
A strong launch for the iPhone 17 pushed smartphone revenue up 23 per cent year on year in the three months to the end of December, Apple said on Thursday — driving overall revenue growth of 16 per cent, far ahead of its guidance of 10-12 per cent.
The smartphone giant said sales in the crucial Chinese market jumped 38 per cent year on year, while it reported $42bn in net income for the quarter, well ahead of expectations.
Chief executive Tim Cook hailed “a remarkable, record-breaking quarter” driven by “unprecedented [iPhone] demand, with all-time records across every geographic segment”.
Apple forecast revenue growth in the current quarter of 13 to 16 per cent year on year, above Wall Street expectations of 10 per cent, with stable or growing margins.
Strong hardware sales and a relatively limited hit from US tariffs have boosted Apple’s fortunes and helped quiet anxiety over its AI strategy, which has been plagued by false starts and rivals poaching top talent.
Its shares were up 22 per cent over the past six months ahead of Thursday’s earnings report, beating the Nasdaq Composite.
Chief financial officer Kevan Parekh said Chinese consumers had snapped up the iPhone 17, driving a wave of people upgrading their Apple model or switching from rivals.
“It really comes down to the reception of the product line-up . . . the iPhone 17 family has seen a huge amount of enthusiasm, and that’s really the driver of performance.”
The return to growth in China follows two years of rocky sales, as it faced stiff competition from local rivals such as Huawei as well as a government pushback against its devices.
Apple is expected to face rising costs in the coming year from a global shortage of memory chips triggered by massive demand from new AI data centres.
Parekh said Apple had a gross margin of 48.2 per cent in the quarter, beating expectations of 47.5 per cent.
The Cupertino, California-based tech company has stayed on the sidelines as its Big Tech rivals pour hundreds of billions of dollars into AI models, chips and data centres.
Apple announced a deal this month to use Google’s Gemini models to power features for the iPhone and improve the Siri voice assistant, in addition to its existing relationship with OpenAI.
Earlier on Thursday, Apple announced it had acquired secretive Israeli start-up Q.AI — whose technology analyses facial expression to understand “silent speech” — as part of an effort to compete in the emerging market for wearable AI-powered devices.
The deal valued the start-up at close to $2bn, the FT reported, making it one of Apple’s biggest-ever takeovers.
Services revenue hit a record $30bn as the high-margin division that includes the App Store, Apple Pay and iCloud continued a recent run of strong growth.
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