TLDR
- Apple is expected to report its strongest iPhone sales growth in four years, with a projected 13.8% increase for the October-December quarter.
- The company partnered with Google to use Gemini AI technology for Siri and Apple Intelligence features, marking a major shift in its AI strategy.
- Apple led the global smartphone market in 2025 with a 20% share, up from 18% in 2024, driven by strong demand for Pro models.
- Total revenue is expected to reach a record $138.43 billion, up 11.4%, with Greater China sales projected to jump about 15%.
- Memory chip shortages may increase iPhone production costs in the coming quarter, though Apple’s supply chain management should help navigate the challenge.
Apple is preparing to announce its holiday quarter results on Thursday. Analysts expect the company to post its best iPhone sales growth since 2021.
The October-December quarter typically represents Apple’s strongest period. This year looks to be no exception. Analysts predict iPhone sales jumped 13.8% during the three-month period.
Strong demand for the iPhone 17 Pro models drove much of the growth. The refreshed camera design and higher storage capacity attracted buyers in China and developing markets. Apple finished 2025 as the global smartphone market leader with a 20% share. That’s up from 18% in 2024, according to research firm Counterpoint.
Total revenue likely hit a record $138.43 billion. That would represent an 11.4% increase from the same quarter last year. The services business, which includes the App Store, likely grew 14.1%. Sales in Greater China are expected to show about a 15% jump.
Google AI Deal Changes Strategy
Apple made a surprising move by choosing Google’s Gemini technology for its AI features. The partnership represents the biggest shift in the company’s AI approach to date.
Wall Street analysts mostly praised the decision. Goldman Sachs said the deal “should demonstrate to the market the iPhone will remain the consumer device of choice for accessing new AI tools.”
The Google partnership lets Apple tap into its installed base of more than two billion devices. It also avoids the massive spending required to build cutting-edge AI models from scratch. Some investors believe this approach makes more sense for Apple than the infrastructure investments pursued by rivals like Microsoft and Alphabet.
Apple’s stock gained just 8.5% in 2025. That trailed Microsoft’s 14.7% rise and Alphabet’s 65.3% jump. The AI-powered rally lifted many tech stocks, but Apple didn’t fully participate.
Memory Chip Crunch Looms
The revamped Siri and Apple Intelligence features haven’t yet become real drivers of smartphone demand. But they’re part of Apple’s longer-term strategy to differentiate its products.
European regulators continue to scrutinize Apple’s payment practices and App Store policies. The company has paid hundreds of millions of euros in fines for abusing its dominant position in the mobile app market. These regulatory challenges could affect the services segment going forward.
Tight memory chip supplies present a near-term concern. Rosenblatt Securities warned that chip shortages could increase iPhone production costs in the fiscal second quarter. The crisis is hitting consumer electronics across the board, from smartphones to gaming consoles. Low-to-mid-range devices will likely feel the impact most.
Apple has navigated supply chain disruptions successfully in the past. Analysts expect the company to use its market-leading scale to pressure suppliers for concessions and lock in supplies.
Earnings are expected to come in at $2.67 per share on an adjusted basis. Analysts have largely maintained their estimates over the last 30 days. Apple has beaten Wall Street’s revenue expectations in seven of the last eight quarters, exceeding estimates by 1.3% on average.
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