Apple CEO Forecasts Holiday Quarter iPhone Sales
Chief Executive Tim Cook gave forecasts for holiday quarter iPhone sales and overall revenue that surpass Wall Street expectations, powered by orders for iPhone 17 models that the company is racing to fulfill amid continuing supply constraints.
The constraints, as well as delays in shipping new phones to China, led Apple to miss iPhone sales forecasts in the fiscal fourth quarter. Although the shortfall was made up for by strength in other areas such as new AirPods that use AI to translate languages, and profit topped Wall Street targets.
Apple shares rose 3.7 percent in after-hours trading. The results showed that the biggest risks many investors saw were Apple's business - its exposure to the US-China trade tensions and its lag in rolling out AI features - played a smaller role than the complexity of building and shipping hundreds of millions of devices.
Cook said he expects iPhone sales in the current, holiday-focused quarter to grow by double digits year over year and Apple's overall revenue to grow 10-12 percent year over year. Those forecasts for Apple's fiscal first quarter of 2026 beat analyst estimates of iPhone sales rising 9.8 percent to $75.91 billion and total sales up 6.6 percent to $132.53 billion, according to data from LSEG.
The outlook comes as Cook said the company struggled to meet demand for several iPhone 17 models and some older iPhone 16 models during its just-ended fiscal fourth quarter. The company also faced delays in China launching its iPhone Air model, the thinnest it has ever created and its biggest iPhone design overhaul in years.
According to reports, Cook said that the China delay was the "primary reason" that sales contracted there during the fiscal fourth quarter.
Also Read: Times Internet Elevates Sriram Hebbar as Group Business Head
"However, we're very enthusiastic about China," he said. "We love the response to the new products there, and we expect to grow or to return to growth in Q1." Cook said Apple is still working to resolve some of the supply constraints.
Also Read: China's MIIT Head Meets Apple CEO Tim Cook in Beijing
Apple's reliance on hardware sales has also left it with greater exposure to U.S. President Donald Trump's trade war with China. Apple executives on Thursday reported tariff-related costs of $1.1 billion, in line with their forecast three months earlier.
Also Read: Microsoft's Massive AI Spending Draws Investor Concerns
Chief Financial Officer Kevan Parekh said he expects $1.4 billion in tariff-related costs in the current quarter ending in December, which would put gross margins at 47-48 percent. Wall Street on average expects gross margins of 46.9 percent, according to LSEG data.