SAN FRANCISCO — Apple’s iPhone sales growth decelerated during its summertime quarter, but the company still delivered financial results that exceeded analyst projections while the trendsetting company continued to catch up to its Big Tech peers in the artificial intelligence race.
The performance announced Thursday was driven largely by strong initial demand for the premium models of the iPhone 17 lineup that went on sale last month.
Although the iPhone 17 lacks the AI wizardry featured in rival devices recently introduced by Samsung and Google, Apple spruced up its latest models with a redesign highlighted by a sleek “liquid glass” appearance on the display screens.
Apple also largely maintained its pricing on its latest iPhones, despite being squeezed by President Donald Trump’s trade war that imposed tariffs on the U.S. devices that the company mostly makes in India and China.
The formula apparently was enough to win over consumers, particularly in the United States, and deliver iPhone sales totaling $49 billion during the July-September period, a 6% from the same time last year. That was slightly below the 8% increase in iPhone sales that had been anticipated by analysts, and less than the 13% bump in sales during the April-June period.
Buoyed by the iPhone results, Apple earned $27.5 billion, or $1.85 per share, nearly doubling its profit from a year ago. Revenue climbed 8% from a year ago to $102.5 billion. Both the earnings and revenue eclipsed the analyst forecasts that steer the stock market.
Apple shares surged 4% in extended trading after the numbers came out.
Apple’s stock has been on a tear since a report earlier this month from the research firm International Data Corp. telegraphed the quarterly results with a preliminary analysis that concluded the company had set a new July-September record for iPhone sales. The rally catapulted Apple’s market value above $4 trillion for the first time earlier this week and now the stage is set for the shares to hit another new high during Friday’s regular trading session.
But Apple has been widely seen as a laggard in the AI craze, one of the reasons that Nvidia — a chipmaker whose processors power the technology — became the first company to be valued at $5 trillion earlier this week.
Apple had promised a wide array of AI features would be rolling out on last year’s iPhone models, but was only able to deliver a few of them. The missing upgrades included a smarter and more versatile version of its frequently flummoxed Siri virtual assistant – a makeover that Apple now doesn’t expect to complete until next year.
But Apple has a long history of late starts when technology starts to head in another direction before it finally catches up and emerges as a front-runner.
If Apple can pull it off again by eventually implanting more AI features on the iPhone, Wedbush Securities analyst Dan Ives believes those breakthroughs could boost the company’s market share by another $1 trillion to $1.5 trillion, translating into $75 to $100 per share.
