Strong iPhone sales to power Apple's holiday quarter, Google AI deal in focus

By Akash Sriram

Jan 28 (Reuters) - Apple is acceptable to study its strongest iPhone income maturation successful 4 years connected Thursday, driven by robust request for its premium Pro models arsenic it prepares to rotation retired artificial quality features ​developed with Google's technology.

Investors, however, volition look for comments from the institution connected however it aims to navigate a planetary ‌memory spot crunch that is apt to rise its outgo and measurement connected margins.

The determination to usage Alphabet-owned Google's Gemini for a revamped Siri and different Apple Intelligence ‌features is the biggest displacement to day successful the company's AI strategy.

Wall Street has mostly lauded the move, saying it allows Apple to pat into its installed basal of much than 2 cardinal devices without the hefty spending required to make cutting-edge models.

The Google woody "should show to the marketplace the iPhone volition stay the user instrumentality of prime for accessing caller AI tools", Goldman Sachs analysts said.

Even without the AI revamp - ⁠the exertion has not yet been a existent ‌driver of smartphone request - income of the latest iPhone 17 bid surged successful the past 3 months of 2025, typically the strongest 4th for Apple.

In China and processing markets, Apple drew customers with the refreshed ‍camera plan and higher retention capableness of the latest Pro devices.

The institution led the planetary smartphone marketplace past twelvemonth with a 20% share, according to probe steadfast Counterpoint, up from 18% successful 2024.

Overall, Apple is expected to study that iPhone income roseate 13.8% successful its October-December fiscal archetypal quarter, according ​to analysts polled by LSEG. That would people the strongest maturation successful much than 4 years.

Total gross apt accrued 11.4% to a ‌record $138.43 billion, aided by a 14.1% leap successful Apple's the services business.

In Greater China, income apt jumped astir 15%, according to Visible Alpha data.

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Still, Apple ended past twelvemonth with conscionable an 8.5% emergence successful its banal price, somewhat missing retired an AI-powered rally that drove a 14.7% summation astatine Microsoft and Alphabet's 65.3% jump.

Some investors judge Apple tin marque wealth from AI without the monolithic infrastructure investments pledged by its Big Tech rivals.

"Apple tin astir apt make a affirmative instrumentality connected precise small AI ⁠investment, acknowledgment to its distribution," said Gerrit Smit, manager of the Stonehage Fleming ​Global Best Ideas Equity fund, which holds Apple stock.

While wide gross grows, Apple's ​services segment, which houses the App Store, could spot challenges amid aggravated European regulatory scrutiny into its outgo practices.