Estimated read time: 2-3 minutes
- Apple's iPhone 17 success eases AI concerns with $143.8 billion quarterly revenue.
- CEO Tim Cook highlights record iPhone upgrades and growth in China to $25.5 billion.
NEW YORK — As Big Tech battles for dominance in artificial intelligence, Apple is flying high on the success of the iPhone.
The company reported earnings that blew past Wall Street's expectations on Thursday, largely driven by the iPhone 17. Revenue hit $143.8 billion for the quarter, up from $124.3 billion a year ago. Meanwhile, iPhone revenue reached $85.3 billion compared to analysts' expectations of $78.2 billion for the quarter.
The results capture the first full quarter of availability for the iPhone 17, which came out in September. And the stakes were high: Apple has been widely perceived as behind in AI, putting more pressure on core products like the iPhone to succeed.
Apple also announced that there are now 2.5 billion Apple devices in use globally. CEO Tim Cook told analysts on Thursday that the company saw record iPhone upgrades and double-digit growth on "switchers," users who switch from Android to the iPhone. Revenue in China, a market where Apple has struggled, also grew to $25.5 billion for the quarter compared to $18.5 billion a year ago.
"The demand for iPhone was simply staggering," Cook said.
The results come after a challenging 2025 for Apple. Last year, the company grappled with tariffs and a high-profile delay of its revamped version of Siri, which Cook said on the call will arrive this year. Apple and Google recently announced that the search giant's AI and cloud technology will power the iPhone maker's AI models, including the upcoming Siri.
Despite the strong results, Apple still has hurdles ahead. Manufacturers are pivoting resources to creating memory for data centers rather than consumer products like smartphones, creating a memory shortage in the tech industry.
Cook said that Apple is currently "constrained" and that it's "difficult to predict when supply and demand will balance." He added that the memory shortage had a "minimal impact" on the December quarter but might be more noticeable in the current quarter.
The iPhone 17 lineup has been broadly successful, but demand for the iPhone Air has been muted, according to data from Consumer Intelligence Research Partners. And while the partnership with Google signals that Apple is making progress in AI, it'll still face pressure to show how it will use AI in new products.
When asked about when Apple plans to make money off AI, Cook said that AI "opens up a range of opportunities" across Apple's "products and services."
He added that the company is "very happy" with its arrangement with Google. Apple didn't share more about the partnership, which Cook said should be viewed as a "collaboration."
