Apple CEO Tim Cook announced last month that the company’s new Apple Intelligence AI tools would “supercharge” the iPhone 16. Recent sales figures reveal that iPhone sales reached $46. 2 billion in the three months ending September, marking a 5. 5% increase year-over-year and surpassing analyst expectations. This growth follows just over two weeks of sales from iPhone 16 preorders, which began on September 13, contributing to positive indications of demand for Apple’s latest device after a prolonged decline in overall revenue due to weak iPhone sales and economic uncertainty. Analysts suggest that Apple Intelligence, which incorporates AI features into the iPhone 16, might stimulate a sales “supercycle. ” While the third-quarter numbers also reflect sales of earlier models, they suggest that the iPhone 16 had a slight positive impact compared to the previous year's launch of the iPhone 15, which saw a 2. 8% increase in sales during the same quarter. Overall, Apple’s revenue rose by 6% year-over-year to $94. 9 billion, slightly higher than expectations, though profits fell by 35%. Cook noted a significant adoption rate for the new iOS, with 18. 1 adopted at twice the rate of 17. 1, reflecting consumer interest in the AI updates. Following the report, Apple shares dipped by about 1%. Recently, Apple introduced initial AI features for the iPhone 16 and iPhone 15 Pro, but these capabilities were not available to early buyers until recently, which may have affected upgrade urgency.

Analysts expressed a particular focus on the upcoming holiday quarter, crucial for Apple’s performance. In China, sales were steady at just over $15 billion, falling short of the anticipated $16. 1 billion amid intense local competition, despite hopes that the iPhone 16 could boost sales. Analysts remain optimistic about a strong holiday season, with a significant number of older iPhones in need of upgrades. The staggered rollout of AI features could limit the immediate momentum of upgrades, but strong service revenue growth and solid demand for the iPhone 16 position Apple favorably for the upcoming season. (Note: The report included contributions from CNN's Ramishah Maruf. )