Ask Onix
Record iPhone sales drive Apple's revenue growth
Apple announced on Thursday that iPhone sales reached an all-time high in the last quarter of 2025, propelling the company's revenue to $144 billion (£82.5 billion), a 16% increase compared to the same period in 2024. The surge marks the strongest growth for the tech giant since 2021, fueled by robust demand in China, Europe, the Americas, and Japan.
iPhone 17 demand outstrips supply
Apple CEO Tim Cook revealed that the company is struggling to keep up with demand for its latest iPhone 17 lineup, describing the situation as a "supply chase mode."
"To meet a very high level of customer demand, we're currently constrained. Demand for the iPhone 17 exceeded our expectations, to say the least," Cook told financial analysts during a call.
Tim Cook, Apple CEO
Cook highlighted that sales in India set a new quarterly record for the region, underscoring the device's global appeal.
Other segments lag behind
While iPhone sales soared, other parts of Apple's business faced challenges. Wearables and accessories, including the Apple Watch and AirPods, saw a 3% decline in sales. Mac computer revenue dropped by over 7%, reflecting weaker performance in these segments.
AI partnership and investor concerns
Cook declined to provide details about Apple's recently announced collaboration with Google, which will integrate Google's Gemini artificial intelligence (AI) into future Apple AI models and Siri updates. The partnership aims to enhance Apple's AI capabilities, but investors remain cautious about the company's strategy.
"Where investors are really wondering about what Apple is going to do next is on AI because they have hung back more than some of the other big tech names," said Anna MacDonald, investment manager at Aubrey.
Anna MacDonald, Aubrey Investment Manager
MacDonald noted that Apple's products, including packaging, are expected to deliver a "pleasurable, perfect experience," and the current limitations of AI tools like ChatGPT may explain the company's deliberate approach.
Market challenges and future spending
Analysts warn that Apple's dominance in the smartphone market is increasingly uncertain. Jacob Bourne, an analyst with Emarketer, emphasized the need for Apple to leverage its Google partnership to deliver seamless and monetizable Siri upgrades.
"It has to make the most of its Google Gemini partnership to deliver Siri upgrades that make consumer voice AI relevant, seamless, and monetizable," Bourne said.
Jacob Bourne, Emarketer Analyst
Apple and Google already collaborate on search, with Google powering Safari's search engine. Apple plans to invest $16 billion in the coming fiscal year to expand its business, including retail stores and infrastructure. However, this spending remains conservative compared to Microsoft, which allocated over $37 billion in its most recent quarter, primarily for AI projects.
Investor reactions and market trends
Wall Street has expressed concerns about Microsoft's heavy AI spending without corresponding revenue growth. Following its quarterly results on Wednesday, Microsoft's stock plummeted by 10% on Thursday, marking its largest single-day decline since 2020.
