Apple CEO Tim Cook gave a forecast for iPhone sales and overall revenue for the holiday quarter that topped Wall Street expectations, boosted by orders for the iPhone 17 models that the company is rushing to fill amid continued supply constraints.
The restrictions, as well as delays in shipping new phones to China, led Apple to miss iPhone sales forecasts in the fiscal fourth quarter, although the weakness was offset by strong performance in other areas, such as new AirPods with artificial intelligence capable of translating languages, and profits exceeded Wall Street targets.
Apple shares rose 3.8% in after-hours trading on Thursday.
The results showed that the biggest risks many investors perceived to Apple’s business — its exposure to trade tensions between the United States and China and its delay in developing AI features — played a smaller role than the complexity of manufacturing and shipping hundreds of millions of devices.
In an interview with Reuters, Cook said he expects iPhone sales in the current quarter, focused on the holiday season, to grow by double digits year-on-year, and for Apple’s total revenue to increase between 10% and 12% year-on-year. Those forecasts for the fiscal first quarter of 2026 exceed analyst estimates, which were forecasting a 9.8% increase in iPhone sales to $75.91 billion and a 6.6% increase in total sales to $132.53 billion, according to data from LSEG.
The forecast comes after Cook mentioned that the company had difficulty meeting demand for several iPhone 17 models and some older iPhone 16 models during its just-concluded fiscal fourth quarter. The company also faced delays in China to the launch of the iPhone Air, the thinnest model it has ever created and the biggest redesign of the iPhone in years.
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Cook told Reuters that the delay in China was the “main reason” sales contracted there during the fiscal fourth quarter.
“However, we are very excited about China,” he said. “We love the response to the new products there and expect to grow or return to growth in the first quarter.”
Cook indicated that Apple is still working to resolve some of the supply constraints.
“Currently in the first quarter, we continue to experience supply constraints on several iPhone 17 models, and we are fulfilling orders as quickly as we can,” Cook said. “It’s a good problem to have.”
Among the tech stocks known as the “Magnificent Seven,” Apple’s earnings have lagged its rivals this year as investors wait to see if it can catch up in artificial intelligence features. The company has said its biggest updates to Siri, its virtual assistant, will come next year, and Cook told Reuters that Apple is “making good progress” on those improvements.
Apple’s reliance on hardware sales has also left it more exposed to the trade war between US President Donald Trump and China. Last quarter, Apple told investors it expected $1.1 billion in tariff-related costs, although the company has previously exceeded its own estimates, with costs lower than feared.
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But Apple is confident that its new iPhone Air, a possible precursor to a foldable phone, along with more powerful iPhone Pro models and improved base versions, will boost sales.
Apple’s fiscal fourth quarter is typically its slowest period for sales, as consumers stop buying older iPhone models and wait for the release of new ones. Apple’s new models began shipping to most markets on September 19, so the quarter includes only limited sales of the newly released devices.
Sales and earnings for the quarter ended Sept. 27 were $102.47 billion and $1.85 per share, respectively, versus expectations of $102.26 billion and $1.77 per share, according to LSEG data.
Sales of the Cupertino, California-based company’s iPhone were $49.03 billion, compared to expectations of $50.19 billion, according to LSEG.
“My expectation is that sales of the iPhone Air are likely to be weak, but the base and Pro models of the iPhone are stronger than expected,” said Ryuta Makino, research analyst at Gabelli Funds. Makino added that the “guidance was better than expected. 10 to 12 percent growth is solid.”
However, the iPhone Air was not shipped to China until October 22 due to regulatory delays caused by its inclusion of only an e-SIM card for wireless connectivity. Apple said sales in its Greater China region were $14.49 billion, compared to analyst estimates of $16.24 billion, according to data from Visible Alpha.
Apple reported that sales in its services segment, which includes Apple TV and its movie business, were $28.75 billion, compared with estimates of $28.17 billion, according to LSEG. Mac sales were $8.73 billion, versus estimates of $8.59 billion, and iPad sales were $6.95 billion, versus estimates of $6.98 billion.
Sales in Apple’s accessories business, which includes AirPods and Apple Watch, reached $9.01 billion, compared with estimates of $8.49 billion, according to LSEG data.
With information from Reuters.
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