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Apple revealed quarterly results that slightly exceeded Wall Street expectations, but iPhone sales were flat on the previous year as the company battles rising competition from local device makers in China.
Apple on Thursday reported revenue of $124.3bn for its December quarter, beating analysts’ estimates in a Bloomberg poll of $124.1bn and up 4 per cent from the same period in the previous year. iPhone sales were $69.1bn, roughly flat year-on-year.
It marks the first full quarter since Apple rolled out “Apple Intelligence”, its suite of artificial intelligence features that include a partnership with OpenAI.
Apple’s chief financial officer Kevan Parekh told the Financial Times the company was “incredibly optimistic about the profound impact of AI”.
The performance of the AI-enabled iPhone 16 was stronger than in markets where Apple Intelligence was not available, he said, suggesting Apple Intelligence has piqued the interest of consumers.
Parekh stepped into the role this year, taking over from Luca Maestri, who had been in the position for a decade.
Revenue for the China region, where Apple has come under increasing competitive pressure from local smartphone makers such as Huawei and Xiaomi, was $18.5bn, down about 11 per cent.
Apple’s services business, which includes the App Store, iCloud and Apple Pay, hit a record high, posting revenue of $26.3bn. Its iPad and MacBook products also had double-digit growth.
Its overall net income was $36.3bn, above estimates of $35.5bn. Diluted earnings per share were $2.40, also above Wall Street expectations.
The results come as concerns grow about the impact of a potential sweeping new US tariff regime under President Donald Trump, who this week promised to impose tariffs on Taiwanese semiconductor manufacturers. Apple’s supply chain relies heavily on exporters in Asia.
Parekh declined to comment on potential tariff risks, saying the company was “closely monitoring the situation”.
Apple shares were flat in after-hours trading on Thursday, following a week of turbulence for tech stocks, with a rout on Nvidia’s shares driven by anxieties around AI breakthroughs by China’s DeepSeek.
Its shares were insulated from the broader tech market rout, and the $600bn loss to Nvidia’s market capitalisation this week leaves the iPhone-maker as the world’s most valuable company, at about $3.6tn.
Ahead of Apple’s earnings report, analysts had been downbeat about whether Apple Intelligence, with its staggered rollout that is yet to reach non-English speakers, had provided any meaningful boost to hardware sales in the shorter term.