Apple’s record iPhone quarter: strong sales, softer Macs, and the AI question

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Summary: Apple reported its best-ever iPhone sales for the quarter, pushing revenue up 16% to $144bn. The headline is strong, but the details show a company still mid-transition: Macs and wearables softened, and Wall Street is watching whether Apple can turn its new Google Gemini partnership into a genuinely useful next generation of Siri and “Apple AI”.

The numbers that matter

  • Revenue: $144bn (≈ £82.5bn), up 16% year-on-year — Apple’s strongest growth since 2021.
  • iPhone: record sales for the quarter, helped by the iPhone 17 range.
  • Wearables & accessories: down about 3%.
  • Mac: down just over 7%.

Geography matters here too: Apple cited stronger sales in China plus gains across Europe, the Americas, and Japan — and said India set a quarterly iPhone record.

“Supply chase mode” = demand > supply

Tim Cook described Apple as being in “supply chase mode” — meaning demand is high enough that Apple is still working to meet it.

That’s meaningful because it implies:

  • the iPhone cycle isn’t being pushed primarily by discounting
  • demand isn’t limited to a single region
  • Apple’s operations are being stretched (which is unusual for a company famous for supply-chain execution)

Why the Mac and wearables dip doesn’t automatically mean “Apple is slowing”

Two realities can be true at once:

  1. iPhone remains the centre of gravity. It drives the installed base, ecosystem stickiness, and the upgrade narrative.

  2. Not every product category moves in sync. Macs and wearables are more cyclical and can lag even in a strong iPhone quarter.

That said, declines in wearables are worth watching because Apple Watch and AirPods are strategic: they deepen the ecosystem and (in Apple’s view) reinforce “daily-use” value.

The real question investors are asking: what is Apple’s AI product?

Apple didn’t share details about how the Gemini partnership will land in products — but that’s exactly what investors care about.

The issue isn’t whether Apple can “add AI.” Anyone can add a chatbot.

The issue is whether Apple can deliver AI that feels:

  • reliable (few hallucinations, consistent behaviour)
  • integrated (works across apps, not just in a single chat window)
  • useful (saves time on real tasks)

An investment manager quoted in the BBC report described sloppy chatbot behaviour as “un‑Apple‑like,” which is a fair summary: Apple’s brand is built on shipping things that feel finished.

Siri has to become more than a voice assistant

If Apple wants AI to matter to everyday users, Siri needs to move from “answer questions” to “complete tasks.”

A practical version of that looks like:

  • understanding intent (“book me a table near the office next Tuesday”) and executing safely
  • acting across apps with permissions (Calendar + Maps + Messages)
  • being transparent about what it can and cannot do

That’s why the analyst quote in the report is important: Apple has to make voice AI relevant and seamless — not just present.

Apple’s spending vs the AI arms race

Apple said it plans $16bn in spending for build-out next fiscal year (stores + infrastructure).

That looks conservative next to peers spending aggressively on AI infrastructure (and Microsoft’s recent heavy capex is used as the comparison in the report).

There are two interpretations:

  • Apple is being disciplined and waiting for clear ROI.
  • Or Apple risks being outpaced by competitors who are scaling AI capacity faster.

The market is also sending a signal: even for Microsoft, huge AI spend without matching revenue growth can get punished quickly.

Bottom line

Apple’s quarter shows the iPhone is still capable of record performance — even in a mature market — but the next phase of competition is likely defined by how effectively Apple turns AI into a product layer across the ecosystem.

If Apple gets that right, AI becomes a new reason to upgrade. If it doesn’t, “AI features” may stay a checkbox while rivals reshape user expectations.

Sources

n English