Apple is raising its growth forecasts with the iPhone 17.

Apple Expects Strong Growth with iPhone 17 Demand

Apple (AAPL) is reporting results that exceed expectations due to the strong demand for the iPhone 17, which was launched in September. The company generated $102.47 billion in revenue in the fourth fiscal quarter, surpassing the consensus estimate of $102.24 billion. Earnings per share were $1.85, successfully beating Wall Street’s forecasts.

Signs of Growth in the Services Segment

iPhone revenues reached $49.03 billion, marking a 6% increase. This indicates the initial success of iPhone 17 sales. The new models, released on September 19, have performed notably well this quarter. However, analysts expected first quarter iPhone sales to be $50.19 billion. Apple CEO Tim Cook noted that both iPhone 17 and the previous generation iPhone 16 models have faced supply issues.

Decline in Other Products Category

Apple's iPad sales remained flat at $6.95 billion in the commercial quarter. Although the company did not launch a new model, it announced the M5 chip iPad Pro in October. Additionally, the services segment, which includes online services and hardware warranties, recorded a 15% growth, achieving $24.97 billion in sales. This segment attracts investor attention as recurring revenues offer higher profit margins.

Decline in Sales in China

The Other Products category, which includes Apple Watch and AirPods, experienced a slight decline with $9.04 billion in sales during the quarter. However, the Mac business saw a notable 13% growth, reaching $8.72 billion in sales. Cook attributed this growth to price reductions for the MacBook Air. However, sales in the Greater China region saw a year-over-year decline of 4%, totaling $14.5 billion.

Forward-Looking Expectations

Cook forecasts that revenues will increase by at least 10% in the current quarter, expecting visible growth in iPhone revenues. LSEG analysts predict Apple will achieve $132.31 billion in sales for the December quarter. However, Apple believes it can surpass these estimates. The CEO stated that consumer interest is strong, and this is reflected in store traffic.