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Apple reported fourth-quarter earnings on Thursday that provided an early glimpse into how the iPhone 17 lineup may be catching on so far. Apple’s earnings for the quarter that ended in September met analysts’ expectations on revenue but slightly missed on iPhone sales. iPhone sales in the fourth quarter were $49 billion, up from $46.2 billion compared to the same period a year ago but slightly lower than the $50.1 billion Wall Street was expecting. Overall revenue was $102.5 billion, an increase from $94.9 billion a year ago. Apple says both revenue and iPhone sales numbers represent a record for the fourth quarter. Services revenue, another closely watched metric, also hit an all-time record at $28.8 billion, an increase from roughly $25 billion a year ago. On Apple’s earnings call on Thursday, CEO Tim Cook said the company expects the December quarter’s revenue “to be the best ever for the company and the best ever for the iPhone,” suggesting strong iPhone 17 sales. Apple shares were up around 3% in after-hours trading. Wall Street is looking for assurance that Apple’s biggest revenue driver is still growing despite concerns that the company is behind in the AI race. Analysts had estimated strong demand for the iPhone 17 lineup, which Apple launched in late September. However, overall sales in China shrunk compared to a year ago, with the company generating $14.5 billion in revenue in the region. In 2024, Apple earned $15 billion during the same period. Thursday’s results paint an early picture of iPhone sales since its fourth quarter ended on September 27, eight days after the iPhone 17 launch. Still, it’s possible that sales slowed in the July and August months as consumers waited for the iPhone 17. The iPhone 17 series outsold its predecessor by 14% in its first 10 days in the United States and China, according to Counterpoint Research, with the base iPhone 17 and iPhone 17 Pro Max being the most in demand. The iPhone Air, touted as the thinnest iPhone ever, is seeing “muted customer interest” according to UBS, which has been tracking retail wait times for new iPhones. Apple’s iPhone business is always under a microscope as the company’s largest revenue driver. But the tech industry is particularly paying close attention, prompted by speculation that another AI-powered gadget may eventually supplant the smartphone. Wall Street will likely look for signals regarding Apple’s AI strategy on the company’s Thursday earnings call. Apple delayed an update to Siri earlier this year that would have brought it closer to OpenAI’s ChatGPT and Google’s Gemini. Rivals like Google, Microsoft and Samsung, meanwhile, continue to pour billions into their AI infrastructure. The earnings come in what has been a challenging year for Apple. The company has been impacted by President Donald Trump’s trade war, with Cook saying the company expected to incur a $1.1 billion hit from tariffs in the fourth quarter. Apple has also faced pressure from the Trump administration to make its iPhones domestically and has committed to investing $600 billion toward expanding its US operations. But Thursday’s earnings, along with the company surpassing a $4 trillion market capitalization earlier this week, represent a turnaround. This story is developing.
