SAN FRANCISCO– Apple’s iPhone sales growth slowed in the summer quarter, but the company still reported financial results that beat analysts’ forecasts as the forward-thinking company continued to catch up with its big-tech peers in the race for artificial intelligence.
The performance announced Thursday was largely explained by strong initial demand for the high-end models of the iPhone 17 range that went on sale last month.
Although the iPhone 17 lacks the AI magic present in competing devices recently introduced by Samsung and Google, Apple has improved its latest models with a redesign highlighted by a sleek “liquid glass” appearance on the display screens.
Apple has also largely maintained prices on its latest iPhones, despite President Donald Trump’s trade war that imposed tariffs on U.S. devices that the company primarily manufactures in India and China.
The formula was apparently enough to convince consumers, particularly in the United States, and to generate iPhone sales totaling $49 billion between July and September, an increase of 6% compared to the same period last year. That’s slightly lower than the 8% increase in iPhone sales expected by analysts, and lower than the 13% increase in sales during the April-June period.
Buoyed by iPhone results, Apple earned $27.5 billion, or $1.85 per share, almost double its profit a year ago. Revenue climbed 8% from last year to $102.5 billion. Profits and revenues eclipsed analyst forecasts that guided the stock market.
Apple shares jumped 4% in extended trading after the numbers were released.
Apple shares have been in freefall since a report earlier this month by research firm International Data Corp. telegraphed quarterly results with a preliminary analysis concluding that the company set a new iPhone sales record between July and September. The rally catapulted Apple’s market value above $4 trillion for the first time earlier this week and the stage is now set for shares to hit a new high during Friday’s regular trading session.
But Apple has been widely seen as a latecomer to the AI craze, one reason why Nvidia – a chipmaker whose processors power the technology – became the first company to be valued at $5 trillion earlier this week.
Apple had promised that a wide range of AI features would be rolled out to last year’s iPhone models, but was only able to deliver a few. The missing upgrades included a smarter, more versatile version of its often-baffled Siri virtual assistant — an overhaul that Apple doesn’t plan to complete until next year.
But Apple has a long history of late starts, when technology begins to head in a different direction before eventually catching up and becoming a leader.
If Apple succeeds again by implementing more AI features on the iPhone, Dan Ives, an analyst at Wedbush Securities, estimates that these advancements could increase the company’s market share by an additional $1 to $1.5 trillion, which would translate to $75 to $100 per share.
