ii view: Apple sales soar on iPhone 17 demand

Customers in an Apple store in Chongqing, China. Photo: Cheng Xin/Getty Images.

First-quarter results to 27 December

• Revenue up 16% to $143.8 billion (£105 billion)
• Adjusted earnings up 19% to $2.84 per share
• Dividend of $0.26 per share, unchanged from Q4

Chief Executive Tim Cook commented: 

“iPhone had its best-ever quarter driven by unprecedented demand, with all-time records across every geographic segment, and Services also achieved an all-time revenue record.”

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ii round-up:

Demand for the new iPhone 17 drove forecast busting results for Apple Inc (NASDAQ:AAPL), with the Magnificent Seven company also offering a confident sales outlook. 

First-quarter revenue to late December climbed 16% from a year ago to $143.8 billion (£105 billion), pushing earnings up 19% to $2.84 per share. Analysts had expected outcomes of $138.5 billion and $2.67 per share respectively. Apple predicts sales growth in the second quarter to late March of between 13% and 16%. Analysts had been pencilling in just 10%.

Shares in the Nasdaq and Dow Jones company rose by almost 1% in post results trading having come into these latest numbers up 9% in 2025. The Nasdaq and Dow Jones rose 20% and 13% respectively last year. Alphabet Inc Class A (NASDAQ:GOOGL), which owns rival smartphone software Android, soared 64%.

iPhone sales during this latest quarter jumped 23% to $85.3 billion, easily surpassing forecasts of $78.7 billion. 

Service revenues, Apple’s second-biggest category which includes subscriptions to TV and music services, climbed 14% from a year ago to $30 billion. Wearables and Mac sales fell 2% and 7% respectively to $11.5 billion and $8.4 billion. 

Geographically, sales improved across all regions including a 38% increase in Greater China. A quarterly dividend of $0.26 per share is unchanged from the prior fourth quarter. 

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares post the results, retaining a target price of $315 per share.

ii view:

Started in 1976, Apple came to the stock market in 1980. The company’s devices and services compete against many rivals including Samsung, Meta Platforms Inc Class A (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN) owned Prime TV, as well as others such as Spotify Technology SA (NYSE:SPOT), Netflix Inc (NASDAQ:NFLX), and The Walt Disney Co (NYSE:DIS). Geographically, the US still dominates at 37% of last year’s sales, followed by Europe at 27%, Greater China at 16%, the rest of Asia at 8%, Japan 7% and the Americas 5%. 

For investors, soaring demand for computer chips to service AI requirements now raises concerns about high chip prices and Apple's costs. A forecast price/earnings (PE) ratio above the 10-year average may suggest the shares are not obviously cheap. Global trade tensions have not gone away, while elevated government debt levels globally pushing taxes higher and slow job growth rates offer consumer outlook uncertainties. 

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On the upside, the tie-in of customers using its services on their Apple devices generates high customer loyalty, with its active device base hitting 2.5 billion. Product innovation now includes AI based intelligence features. Product and geographical diversity exist including exposure to payment services, while the dividend, although not a core attraction, has been increased consecutively for more than 10 years, with the shares yielding around 0.4%.

On balance, and despite ongoing risks, this well managed tech titan looks to remain worthy of its place in many diversified investor portfolios. 

Positives:

• Diverse geographical markets
• Strong customer loyalty

Negatives:

• Dependency on iPhone sales
• Currency headwinds

The average rating of stock market analysts:

Buy