Apple reports best iPhone quarterly sales performance in over four years
Investing.com -- Apple (NASDAQ:AAPL) on Thursday comfortably beat profit and revenue expectations for its fiscal Q1 2026, as the tech behemoth saw its best quarterly iPhone sales growth performance in over four years.
iPhone sales jumped 23.3% Y/Y to $85.27 billion, marking the biggest increase since Q4 2021.
Shares of the world’s third-largest company rose 1.1% in extended trading.
Consumers have embraced the company’s latest iPhone 17 models, especially the premium Pro devices, helping Apple gain a leading 20% of the global smartphone market share in 2025, up from 18% in 2024.
The strong iPhone revenue performance comes at a time when Apple, like many other smartphone players, is grappling with memory chip crunch issues. Apple rival Samsung Electronics (KS:005930) earlier on Thursday said the chip shortage would continue for the time being.
The surging iPhone sales will also likely be a relief for investors, amid concerns over the lack of visibility in Apple’s AI ambitions in terms of being a revenue driver.
“We believe Apple’s growth strategy in the next few years could continue to be new form factors and new products, as AI’s commercialization and monetization remains challenging. Not only is the AI use case not clear for consumers, rapidly rising memory prices would likely make any edge AI applications harder to financially justify in the next two years,” Jefferies analysts led by Edison Lee had said in an earnings preview note on Monday.
Looking at the quarterly numbers, Apple earned $2.84 per share on revenue of $143.76 billion for the three months December 27, 2025. Analysts had been expecting a profit of $2.68 per share on revenue of $138.40 billion.
Sales of Mac fell 6.7% Y/Y to $8.39 billion, while revenue from iPad improved 6.3% Y/Y to $8.60 billion. Apple’s wearables, home and accessories segment saw a revenue decline of 2.2% Y/Y to $11.49 billion.
Apple’s Services segment, which includes online subscriptions such as iCloud, Apple Music, as well as fees collected from the App Store, saw sales growth of 13.9% Y/Y to $30.01 billion.
"Apple delivered a record-breaking quarter driven by unprecedented iPhone demand and another all-time high for Services revenue, validating its strategy amid an industry in constant flux and reinforcing its position atop the global smartphone market," Jacob Bourne, analyst at Emarketer, said.
"Yet maintaining that dominance is perhaps more uncertain than ever, hinging on the right calls around pricing and developing the next generation of devices, particularly wearables and the anticipated foldable iPhone," he added.
The Tim Cook-led company’s latest results come over two weeks after signing an agreement with Alphabet’s Google, which will see Apple fold the company’s Gemini artificial intelligence model into its handsets’ Siri assistant and other Apple Intelligence features.
The move has been seen as one of the biggest shifts to date in Apple’s AI strategy, and has been viewed as a push by the Magnificent 7 member to bolster its position in the AI arms race.
"(Apple) also has to make the most of its Google Gemini partnership to deliver Siri upgrades that make consumer voice AI relevant, seamless, and monetizable. The backdrop of inflation-fatigued consumers and an ongoing memory chip shortage will pressure hardware margins in coming quarters, making that high-margin Services momentum even more vital," Emarketer’s Bourne said.
In another AI-related development, Apple earlier on Thursday acquired Israeli startup Q.ai in its first sizable deal in years.
