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Apple’s iPhone sales hit a record high during the holiday quarter, despite the company’s delayed rollout of artificial intelligence features that prompted it to seek assistance from Google.
Financial results released Thursday showed iPhone sales reached an unprecedented $85.3 billion in the October-December period, representing a 23% increase from the same quarter last year. This marks the highest quarterly iPhone revenue since the device’s 2007 debut, demonstrating the continued loyalty of Apple’s customer base.
“The demand for iPhone was simply staggering,” said Apple CEO Tim Cook during an analyst conference call, where he projected the device would eventually serve as a platform for cutting-edge AI applications.
The strong iPhone performance helped drive Apple’s quarterly profit to $42.1 billion, or $2.84 per share, a 16% increase year-over-year. Total revenue climbed to $143.8 billion, also up 16% from the previous year. Both earnings and revenue figures exceeded analyst expectations.
Apple achieved this sales milestone despite failing to deliver on its promised AI enhancements for Siri that were slated for 2024. Instead, the company focused on design innovations, including a new “liquid glass” aesthetic for the iPhone 17 lineup and similar visual updates provided to older models through a free software upgrade last September.
In response to the earnings report, Apple’s shares rose approximately 1% in after-hours trading. However, the stock remains slightly down for the calendar year so far, reflecting ongoing investor concerns about the company’s AI strategy.
Zacks Investment Research analyst Ethan Feller suggested that worries about Apple’s late entry into the AI race may have been overstated. He noted that Apple appears well-positioned to gradually integrate AI capabilities “as a feature that scales naturally across its ecosystem” of devices, which now includes more than 2.5 billion active products worldwide.
To address its AI shortcomings, Apple has partnered with Google, leveraging the search giant’s latest AI model, Gemini 3. This collaboration represents a tacit acknowledgment of Apple’s challenges in a technology widely considered the industry’s most significant advancement since the iPhone itself.
The Cupertino-based tech giant plans to maintain momentum by releasing previously delayed AI features in the coming months, including a significant Siri upgrade designed to make the virtual assistant more conversational and versatile.
Despite trailing competitors in AI development, the iPhone finished 2023 as the global sales leader with nearly 20% market share, narrowly edging out Samsung, according to data from research firm International Data Corp.
Apple’s confidence in continued growth was evident in its forecast for the current January-March quarter, projecting revenue growth of at least 13% compared to the same period last year—exceeding analyst expectations of approximately 10%.
However, the company faces a significant challenge from the ongoing shortage of memory chips, a crucial component for smartphones and laptops. The scarcity has been exacerbated by surging demand for the same processors in data centers being constructed to power AI applications.
This shortage threatens not only to constrain iPhone production but also to increase component costs, which could further pressure Apple’s profit margins. The company may eventually need to raise product prices to offset these rising expenses.
“We do continue to see market pricing for memory increasing significantly,” Cook acknowledged during Thursday’s call with analysts. “As always, we’ll look at a range of options to deal with that.”
As Apple navigates these challenges, its ability to balance innovation with supply chain constraints will likely determine whether it can maintain its market leadership position in an increasingly AI-focused technology landscape.
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6 Comments
Impressive that Apple’s iPhone sales surged to a new quarterly high, despite AI rollout delays. Speaks to the enduring appeal of their devices. Curious to see how they integrate AI capabilities into the iPhone going forward.
It’s interesting that Apple had to seek help from Google for their AI features. Speaks to the complexity of developing advanced AI. Still, the strong iPhone sales numbers are a testament to the brand’s strength.
Agreed, Apple’s brand power seems to outweigh any stumbles in AI so far. They likely have the resources to get their AI offerings up to par over time.
The demand for iPhones remains strong, even with the AI missteps. Apple’s focus on design innovations is smart, as that’s a key part of their appeal. Curious to see how they balance AI and hardware going forward.
Apple’s iPhone sales surge is a notable achievement, despite the AI challenges. Their customer loyalty is clearly strong. Curious to see how they advance their AI offerings to keep pace with the competition.
Impressive quarterly results for Apple, especially the record iPhone sales. Speaks to the enduring appeal of their devices. Will be interesting to see how they integrate AI capabilities into future iPhone models.