Apple’s iPhone sales surged to a new quarterly high during the holiday season, despite setbacks in artificial intelligence that led the tech pioneer to seek assistance from Google. The October-December results, announced Thursday, demonstrate the loyalty of Apple’s customers, who eagerly purchased the latest iPhone 17 models even though the company has yet to fulfill its 2024 promise to enhance Siri with smarter AI capabilities. To counterbalance its AI shortcomings, Apple introduced a new “liquid glass” design for the iPhone 17 and rolled out updates to older models via a free software upgrade released last September. This strategy helped drive iPhone sales to $85. 3 billion, a 23% rise compared to the same period last year. This marks Apple’s highest iPhone sales for any three-month span since the product’s launch in 2007. “The demand for iPhone was simply staggering, ” Apple CEO Tim Cook said during a conference call with analysts, predicting that the device will evolve into an advanced platform for AI. The strong iPhone sales pushed Apple to a quarterly profit of $42. 1 billion, or $2. 84 per share, reflecting a 16% increase year-over-year. Total revenue also climbed 16% to $143. 8 billion, outperforming analysts’ forecasts that guide investor expectations. Following the release of these figures, Apple’s shares rose nearly 1% in after-hours trading. However, the stock price remains slightly lower for the year and has not significantly increased since the end of 2024. Ethan Feller, an analyst at Zacks Investment Research, said concerns over Apple’s delayed entry into AI seem exaggerated. He believes Apple is well positioned to integrate AI features more broadly across its ecosystem, which includes iPads, Mac computers, smartwatches, alongside iPhones.

Apple reported that over 2. 5 billion active devices worldwide are running its various operating systems. The Cupertino, California-based company aims to maintain momentum by releasing delayed AI features, such as an upgrade to Siri designed to make the assistant more conversational and versatile. To achieve this, Apple is utilizing Google’s latest AI model, Gemini 3, implicitly acknowledging its own limitations in a technology regarded as the industry's most significant breakthrough since the iPhone’s debut. Despite its AI challenges, the iPhone finished last year as the global sales leader, holding nearly a 20% market share that slightly edged out Samsung, according to research firm International Data Corp. Reflecting confidence, Apple projected its revenue for the January-March quarter will increase by at least 13% from last year, surpassing the roughly 10% growth analysts had expected. The AI boom presents another hurdle for Apple: a shortage of memory chips for smartphones and laptops, driven by high demand for the same processors powering massive data centers built to support AI. This shortage not only threatens to limit iPhone production but also increases memory chip prices—a factor already squeezing Apple’s profit margins. To offset rising chip costs, Apple may eventually raise prices on iPhones and other products. “We do continue to see market pricing for memory increasing significantly, ” Cook told analysts Thursday. “As always, we’ll explore a range of options to deal with that. ” Copyright © 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.