Apple Posts Blowout iPhone Sales

Apple's Tim Cook

Apple reported record-breaking iPhone sales and profits for its fiscal first quarter (ended December 27, 2025), with total revenue hitting $143.8 billion (up 16% year-over-year) and earnings per share at $2.84 (up 19%), both surpassing Wall Street expectations.

iPhone revenue surged 23% to $85.3 billion, marking the device's best-ever quarter, driven by strong demand for the iPhone 17 lineup that prompted faster-than-usual upgrades. The results set all-time records across every geographic segment, including a notable rebound in China.

"The demand for iPhone was simply staggering," said CFO Kevan Parekh, who also noted Apple's active installed base exceeded 2.5 billion devices, up from 2.35 billion a year earlier. 

The blowout performance came despite challenges like delayed AI features and higher component costs from surging demand for AI servers and devices. Memory, storage, and chip prices have risen sharply as AI companies compete for supplier capacity, pressuring Apple's margins later in 2026.

The Wall Street Journal reports analyst Ming-Chi Kuo expects Apple to absorb these increases rather than raise prices for the upcoming iPhone 18 lineup, leading to lower gross margins.

Offsetting factors include a halved tariff on Chinese imports under the Trump administration (saving on expected $1.4 billion in December-quarter costs) and a shift to premium models: Pro and Pro Max variants accounted for an estimated 52% of U.S. iPhone sales (up from 39% the prior year), boosting average selling prices.