TLDR
- Apple reported fiscal Q1 revenue of $143.8 billion, exceeding analyst expectations by $5.3 billion with 16% annual growth
- iPhone 17 drove 23% revenue increase to $85.27 billion, setting records in every geographic market
- Greater China sales jumped 38% to $25.53 billion, crushing the $21.32 billion forecast
- March quarter revenue expected to grow 13-16% despite processor and memory chip supply limitations
- Services grew 14% to $30.01 billion while wearables missed at $11.49 billion
Apple crushed Wall Street forecasts in its fiscal first quarter. The tech giant posted revenue of $143.8 billion, up 16% from last year.
Analysts expected $138.48 billion. The beat came in at over $5 billion above estimates.
Earnings per share hit $2.84 versus the $2.67 consensus. Net income reached $42.1 billion for the quarter.
CEO Tim Cook credited the iPhone 17 lineup for the results. He called demand “staggering” in post-earnings interviews.
iPhone revenue climbed 23% to $85.27 billion. Wall Street projected $78.65 billion.
The company set sales records across all regions. Apple’s active device base now stands at 2.5 billion, up from 2.35 billion a year ago.
Cook said the company gained market share from Android during the December quarter. iPhones attracted record numbers of upgraders and switchers.
China Delivers Massive Beat
Greater China provided the quarter’s standout performance. Regional sales surged 38% to $25.53 billion.
Analysts forecast just $21.32 billion. The beat exceeded expectations by nearly $4.2 billion.
The region covers mainland China, Taiwan, and Hong Kong. iPhone 17 models drove the growth.
Cook told analysts the performance surprised even internal projections. “We saw a lift that was much greater than we thought we would see,” he said.
Android switchers posted double-digit growth in the region. Upgraders hit all-time records in mainland China.
Apple has faced headwinds in China from local rivals and regulatory pressure. The strong quarter suggests improved momentum in the key market.
Supply Constraints Impact Guidance
Apple forecast March quarter revenue growth of 13% to 16%. That range translates to $107.8 billion to $110.66 billion.
Analysts expected 10% growth to $104.84 billion. The guidance topped estimates despite supply warnings.
Cook said the company faces production constraints. “We’re currently constrained, and it’s difficult to predict when supply and demand will balance,” he told analysts.
Processor manufacturing limits iPhone production. Taiwan’s TSMC makes Apple’s chips and is dealing with capacity issues.
Memory chip shortages add pressure. A global DRAM shortage has impacted the electronics industry.
Samsung and SK Hynix dominate the DRAM market. Both warned that smartphone makers would face the worst of the shortage.
AI production priorities have worsened the situation. Data center memory offers higher margins than consumer electronics memory.
Mixed Results Across Categories
Mac sales disappointed at $8.39 billion versus estimates of $8.95 billion. Revenue fell 7% year-over-year.
Apple launched an updated MacBook Pro with M4 chip in November. The new models failed to meet expectations.
iPad revenue beat forecasts at $8.60 billion. Sales grew 6% as half of buyers were first-time iPad owners.
Wearables revenue missed targets at $11.49 billion. Analysts expected $12.04 billion.
AirPods Pro 3 demand exceeded Apple’s projections. Cook said the new translation features caught the company off guard.
Services revenue reached $30.01 billion, slightly below the $30.07 billion estimate. The segment grew 14% annually.
Apple TV viewership climbed 36% in December. The company expects Services to maintain similar growth rates.
Apple partnered with Google earlier this month to integrate Gemini into Siri. The company also bought AI startup Q.ai for $1.6 billion.
Finance chief Kevan Parekh noted AI investment needs beyond normal product spending. R&D expenses rose to $10.89 billion from $8.27 billion.
Apple returned nearly $32 billion to shareholders through buybacks and dividends. Gross margin came in at 48.2%, above the 47.5% estimate.
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