Apple reportS $143.8 billion in Q1 revenue, up 16% from last year

Apple brought in $143.8 billion for the December quarter, beating every estimate. That’s a 16% jump from last year. Profit hit $42.1 billion, or $2.84 per share, up from $2.40. Analysts were only expecting $2.67. After the report, shares rose 3% in extended trading.

The biggest reason is, of course, the iPhone 17. It drove $85.27 billion in sales, which is 23% higher than a year ago. Wall Street expected only $78.65 billion. Timmy Cook said, “The demand for iPhone was just simply… staggering.”

iPhone sales explode as China drives results

Apple made $25.53 billion in China, Taiwan, and Hong Kong. That’s up 38%. Cook said it was because of the iPhone.

“We set an all-time record for upgraders in mainland China, and we saw double digit growth on switchers.” Upgraders are old users buying new models. Switchers are those ditching Android.

Tim said, “We saw a lift that, frankly, was much greater than we thought we would see.” The jump came from the product itself, not marketing. It’s clear iPhone 17 did the work.

The number of Apple devices now active is 2.5 billion, up from 2.35 billion a year ago. That includes iPhones, Macs, and iPads. It also tells you how many users are tied into the company’s ecosystem.

That number matters for services like Apple TV, iCloud, and App Store purchases. The Mac didn’t perform as well. It brought in $8.39 billion, lower than the $8.95 billion forecast. Sales dropped 7% from the same period last year. Apple released a new MacBook Pro in November with the M4 chip. That didn’t boost results much.

The iPad did better. Sales were $8.6 billion, which is 6% higher than last year. That beat expectations of $8.13 billion. Tim mentioned that half of the people who bought an iPad were first-time buyers.

Services and wearables produce mixed outcomes

Apple made $30.01 billion from services. That includes things like Apple TV, iCloud, advertising money from Google, and AppleCare. The forecast was $30.07 billion, so the result was basically flat. But Tim said Apple TV viewership rose 36% in December compared to last year.

On wearables and accessories, the numbers dropped. This group includes AirPods, Apple Watch, Vision Pro, and others. Sales came in at $11.49 billion, down 2% from the previous year. That missed the $12.04 billion estimate. It’s the only major segment that fell.

Apple didn’t give any official forecast for the next quarter. But finance boss Kevan Parekh usually offers clues during the earnings call. This time, analysts are guessing revenue of around $104.84 billion for the current quarter.

AI spending stays low as chip costs raise concerns

Apple isn’t throwing cash at AI like other big players. Meta and Microsoft are spending hundreds of billions. Apple? Not even close. But earlier this month, the company did make a move. It announced a deal with Google to use the Gemini AI model to power its Apple Intelligence features.

“We have absolutely the best platforms in the world for AI,” Tim said. But when it came to actual spend, it’s low. Capital spending was $2.37 billion, down from $2.94 billion a year ago. Research and development, though, increased.

It was $10.89 billion, up from $8.27 billion.

Parekh said, “AI is going to require incremental investment on top of our normal product roadmap investment.”

There’s also the issue of memory prices. Devices like the iPhone, Mac, and iPad use a lot of storage and memory. Prices are up everywhere due to AI demand. Parekh didn’t give a straight answer on how Apple plans to handle that, but it’s a real cost issue coming fast.

Finally, Apple spent almost $32 billion last quarter on stock buybacks and dividends. That’s a huge chunk of capital going back to shareholders.

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