As consumers scramble to upgrade to the new iPhone 17, Apple reported record sales and predicted a strong December quarter.
According to Chief Financial Officer Kevan Parekh, the company anticipates a 10% to 12% increase in total revenue over the holiday quarter, which is significantly higher than the 6% growth forecast by Wall Street. He ascribed the profit to a “double-digit” rise in iPhone sales over the same period last year.
Apple anticipates revenue growth with the new iPhone upgrade
iPhone sales in the September quarter came in at $49 billion, which was a little less than anticipated. Parekh claimed that a number of models were impacted by supply constraints, but Tim Cook, the CEO, clarified during the earnings call that the shortages were due to “very strong demand.” Following the announcement, Apple’s stock increased by roughly 3% in after-hours trading.
Apple has now recorded two consecutive quarters of year-over-year iPhone revenue increases following years of sluggish growth. Additionally, the company is increasing its investments in artificial intelligence, which it said is the reason why operating expenses for the December period will be about $1.5 billion higher than analysts had predicted. Apple still spends far less on AI than its rivals, even with the increase. Apple’s total quarterly revenue of $102.5 billion was marginally higher than Wall Street’s $102.2 billion forecast and about 8% higher than the same period last year. Early data prior to the earnings release showed that the iPhone upgrade was in high demand, with buyers purchasing the device right away.
Consumer Intelligence Research Partners reported “great interest in the Pro and Pro Max models, while the new iPhone 17 Air model showed virtually no sign of traction.” When asked how the Air is selling in comparison to other iPhone 17 models, Cook chose not to respond. According to Parekh, both the iPhone 16 and 17 models were impacted by supply shortages during the September quarter.
China and large growth
China’s sales decreased from the year before, escalating a regional competition in which competitors have increased their market share. Cook stated that during the holiday quarter, Apple anticipates a return to growth in China.
In the fiscal year that concluded in September, Apple also achieved its first-ever annual services revenue of over $100 billion. Services produce higher profit margins than hardware sales, including app sales, Google’s search fees for Safari, and subscriptions like Apple Music and Apple TV. A recent court decision permitted Google, a division of Alphabet, to keep paying Apple over $20 billion a year to display search results in Safari. According to analysts, those payments amount to roughly a fifth of Apple’s operating profit. Revenue from services, including Google payments, increased by 15% compared to the September quarter of the previous year.
Featured Image Credit: Gabriel Freytez; Pexels: Thank you!
