Apple has projected stronger-than-expected iPhone sales and overall revenue for the holiday quarter, buoyed by strong demand for its latest iPhone 17 models, CEO Tim Cook announced on Thursday. The tech giant is now working to meet high order volumes amid continuing supply chain issues, particularly affecting shipments to China.
During the company’s fiscal fourth-quarter results, Apple reported that iPhone sales came in below forecasts due to production bottlenecks and shipment delays of the iPhone 17 and iPhone Air models. However, the shortfall was balanced by growth in other divisions, including the launch of Apple’s new AI-powered AirPods that can translate languages in real time.
Apple’s quarterly profit surpassed Wall Street expectations, causing its shares to jump 3.7% in after-hours trading. Cook told Reuters that iPhone sales are expected to rise by double digits in the upcoming quarter, while total revenue is forecast to increase between 10% and 12% year over year — above analysts’ estimates of 9.8% iPhone growth and 6.6% overall revenue growth.
Supply Challenges and China Market Outlook
Apple faced significant supply challenges in the last quarter, particularly for the iPhone 17 and iPhone 16 lines. The launch of the iPhone Air — Apple’s thinnest and most advanced design yet — was delayed in China due to regulatory concerns over its e-SIM-only connectivity. Cook acknowledged that this delay affected regional sales but expressed optimism about the Chinese market.
“We are very enthusiastic about China,” Cook said. “We love the response to the new products there, and we expect to return to growth in Q1.”
Industry analysts noted that while sales of the base and Pro models of the iPhone 17 performed well, demand for the iPhone Air was softer in early weeks.
AI Integration and Broader Growth
Apple’s strong quarterly performance also alleviated concerns about the company’s exposure to U.S.-China trade tensions and its relatively slow rollout of artificial intelligence features. Tariff costs stood at $1.1 billion, in line with forecasts, with CFO Kevan Parekh expecting $1.4 billion for the next quarter — maintaining gross margins between 47% and 48%.
Cook further revealed that Apple is developing major upgrades for Siri, its virtual assistant, with enhanced AI capabilities expected next year. “We are making good progress,” he said, underscoring Apple’s strategy to compete in the rapidly evolving AI space.
Meanwhile, Apple’s services division — including Apple TV, iCloud, and its growing film business — generated $28.75 billion in revenue, surpassing expectations. Mac and iPad sales also exceeded projections, while the accessories segment, led by AirPods and Apple Watch, earned $9.01 billion.
Holiday Outlook
With the holiday season underway, Apple is banking on its new lineup — including redesigned iPhones, AI-driven accessories, and software upgrades — to fuel sustained growth. The company’s ability to manage supply shortages and maintain production momentum will be crucial in transforming robust demand into record-breaking holiday performance.
