Danielle KayeEconomic journalist
ReutersThe latest iPhones have generated “a tremendous response” around the world, Apple boss Tim Cook said as the tech giant released its latest financial results.
The company unveiled its thinnest iPhone, the Air, in September, along with upgraded iPhone 17 models, marking a bumper harvest for the company.
He said he expects the upcoming Christmas and New Year period to be a success, predicting that overall revenues will be up to 12% higher than the same period last year.
But Apple narrowly missed estimates for iPhone sales in its fourth quarter ended in September, which CEO Tim Cook blamed on supply constraints for several iPhone models as well as delayed shipments to China.
Even so, on a call with analysts, Cook said Apple was heading into the holiday season “with our most powerful lineup ever.”
The iPhone Air helped attract customers and increase sales.
If the company meets its sales forecast for the holiday season, it would be Apple’s “best quarter ever,” Chief Financial Officer Kevan Parekh told analysts Thursday.
Apple reported overall fourth-quarter revenue of $102.5 billion (£77 billion), beating analyst estimates and representing an 8% increase from the previous year. But iPhone revenue, in particular, was slightly lower than expected, at $49bn (£37bn).
Mr. Cook noted that global demand for the iPhone 16 and 17 models has been robust, despite constraints that led to sales failure in the last quarter.
“We don’t predict when supply and demand will balance out,” Cook said. “We obviously work very hard to achieve this, because we want to offer as many products as possible to customers.”
In the Chinese market, he said he “couldn’t be happier with how things are going,” citing the strong reception to the new iPhone 17.
Data from Counterpoint, a technology market research company, showed that sales of the iPhone 17 in the United States and China in the first 10 days increased by 14% compared to sales of the iPhone 16.
The effects of tariffs imposed by US President Donald Trump also remain top of mind for Apple investors. It makes many iPhones in China and its global supply chain makes it vulnerable to trade wars – although a recent meeting between Trump and President Xi has raised hopes of a de-escalation of tensions.
Mr Cook told analysts on Thursday that the company had suffered a $1.1bn (£836m) reduction in tariffs in the recently ended quarter. He said the hit would likely amount to an additional $1.4 billion over the holiday quarter as Trump imposes taxes on those he considers “unfavorable” to the U.S. economy.
Amazon, which also reported its quarterly results on Thursday, expects sales to be between $206 billion (£156 billion) and $213 billion (£161 billion) for the current quarter through December, largely in line with analysts’ expectations.
“We are encouraged by the start of peak season,” Brian Olsavsky, Amazon’s chief financial officer, told analysts.
Amazon also said revenue from Amazon Web Services (AWS), its cloud computing business, grew 20% in the third quarter from a year earlier – its fastest pace since 2022.
For investors, this AI-led growth could be reassuring, as Apple faces stiff competition in the race to dominate the AI boom.
Apple’s stock is lagging behind rivals Microsoft and Alphabet, both of which on Wednesday reaffirmed their commitment to spending big on the technology. These companies have reported even faster growth than Amazon in their cloud computing businesses.
“We continue to see strong demand for AI and core infrastructure, and we have been focused on accelerating capacity,” Amazon Chief Executive Officer Andy Jassy said in a statement.
