While major tech titans vie for supremacy in artificial intelligence, Apple is basking in the glow of the iPhone’s success.
The company on Thursday revealed earnings that surpassed Wall Street expectations, largely fueled by the iPhone 17. Quarterly revenue hit $143.8 billion, an increase from the $124.3 billion posted a year prior. Meanwhile, iPhone revenue reached $85.3 billion against analysts’ consensus estimate of $78.2 billion for the quarter.
These figures represent the first full quarter of availability for the iPhone 17, which launched in September. The stakes were high: Apple is widely perceived as trailing in the AI race, placing even greater pressure on flagship offerings like the iPhone to perform well.
Apple (AAPL) also disclosed that its installed base worldwide now stands at 2.5 billion devices. CEO Tim Cook informed analysts Thursday that the company experienced record iPhone upgrades and double-digit growth in “switchers”—users migrating from Android to the iPhone. Revenue in China, a region where Apple had faced headwinds, also surged to $25.5 billion for the quarter, up from $18.5 billion last year.
“The demand for the iPhone has been simply phenomenal,” Cook stated.
These results follow what had been a challenging year for Apple in 2025. Last year, the company grappled with tariff issues and the high-profile delay of its revamped Siri, which Cook assured would arrive this year. Apple recently announced a pact with Google, where the search giant’s cloud and AI technologies will power the iPhone maker’s AI-based models, including the upcoming Siri.
Despite the robust financials, Apple still faces hurdles. Manufacturers are prioritizing resources toward building memory for data centers over consumer electronics like smartphones, leading to a memory component shortage across the tech industry.
Cook mentioned that Apple is currently “constrained” and that it’s “difficult to predict when supply and demand will balance out.” He added that the memory shortage had a “minimal impact” on the December quarter but might be more pronounced in the current one.
The iPhone 17 line, overall, is proving popular, though demand for the iPhone Air has remained lukewarm, according to Consumer Intelligence Research Partners. And while the Google partnership signals progress on the AI front, the company will still be under scrutiny to demonstrate how it will leverage AI within its new product ecosystem.
When pressed on when Apple expects to monetize AI, Cook responded that AI “opens up a vast array of opportunities” across all of Apple’s “products and services.”
He further noted that the company is “very pleased” with the agreement inked with Google. Apple provided no further specifics on the arrangement, which Cook characterized as a “collaboration.”
About the Author
