iPhone 17 series "Selling Out," Apple earns $460 million daily, highlighting the overwhelming demand and popularity of the latest models. The new lineup has set sales records, with consumers rushing to purchase, leading to shortages and long wait times. This surge demonstrates Apple's strong market position and the global enthusiasm for its innovative technology.

As the US stock market enters Q4 earnings season, several companies have reported better-than-expected results one after another. Following Microsoft, Meta, and Tesla, on January 29th, local time, global tech and consumer electronics giant Apple delivered a record-breaking latest earnings report.

In the quarter ending December 27, 2025 (Q1 of fiscal year 2026), Apple’s total revenue reached $143.756 billion, a 16% year-over-year increase from $124.3 billion in the same period last year, surpassing market expectations of $138.4 billion and setting a new record for the highest quarterly revenue in Apple’s history; net profit was $42.097 billion, up 15.9% from $36.33 billion last year, equivalent to an average daily net income of $4.63 million (about RMB 32 million).

“Greatly exceeding our expectations.” Regarding this quarterly performance, Apple CEO Tim Cook stated, “Driven by unprecedented market demand, iPhone achieved its best-ever quarter, with revenue across all regions hitting record highs; service revenue also reached a new high, up 14% year-over-year.”

Additionally, in this quarter, Apple’s active device count has exceeded 2.5 billion.

The record-breaking performance and strong profit margins drove Apple’s US stock earnings to $2.84 per share, up 19% year-over-year, also a new high, while generating nearly $54 billion in operating cash flow and returning close to $32 billion to shareholders.

iPhone 17 Series Hot Sales

Whether it’s the operational data disclosed in the earnings report or the remarks from executives during the conference call, they all reflect the strong growth of the iPhone as the core engine in this quarter.

In the quarter ending December 27, 2025, iPhone revenue reached $85.269 billion, a significant increase of 23% year-over-year, accounting for 59.3% of total revenue, up nearly 4 percentage points from the same period last year.

“This is the strongest iPhone product line we’ve ever had, and it’s also the most popular to date. Throughout the quarter, consumer enthusiasm for the iPhone was unprecedented, and users showed great excitement for its various features,” Cook said during the earnings call, noting that iPhone set records in all geographic regions.

In September 2025, Apple launched the latest iPhone 17 series at its fall event, including the iPhone 17 standard, iPhone 17 Pro, iPhone 17 Pro Max, and for the first time, the iPhone Air.

Among them, the iPhone 17 standard model, with comprehensive upgrades and outstanding cost performance, became the choice for many users; the iPhone 17 Pro and iPhone 17 Pro Max saw significant design changes from previous generations, with outstanding performance, battery life, and photography capabilities, becoming bestsellers and further consolidating Apple’s dominance in the high-end market.

The success of the iPhone 17 series also helped Apple reclaim the top spot in the global smartphone market. According to Counterpoint Research data, in October 2025, Apple’s actual smartphone shipments increased by 12% year-over-year, with a market share of 24.2%, setting a new record for the highest monthly global market share. Additionally, in the first six weeks of sales, the iPhone 17 series outperformed the same period sales of the previous iPhone 16 series.

Omdia’s research data shows that in Q4 2025, global smartphone shipments grew by 4% year-over-year, and thanks to the hot sales of the iPhone 17 series, Apple achieved a 25% market share, setting a quarterly record, and has been the global sales leader for three consecutive years.

Regarding the reasons for the YoY growth of the iPhone, senior analyst Varun Mishra from Counterpoint Research pointed out that Apple is benefiting from multiple growth factors—strong replacement demand in mature markets, ongoing high-endization trends, expansion in emerging markets, and a richer product portfolio. Besides the newly added iPhone 16E model in 2025, there are more low-cost older models available in various markets, providing consumers with more choices than ever before.

Big Jump of 38% in Greater China

Apple once faced setbacks in Greater China, but now that situation has completely changed.

From regional market perspectives, this quarter’s performance in Greater China was particularly impressive—revenue reached $25.526 billion, a 38% increase from $18.513 billion in the same period last year. In comparison, the Americas, as a core market contributing over 40%, achieved revenue of $58.529 billion, up 11.2%; Europe, as the second-largest market, reached $38.146 billion, up 12.7%.

Clearly, the strong growth in Greater China is mainly driven by the iPhone business. Cook praised this during the earnings call, saying, “This is the best quarter ever for the iPhone business in Greater China. The growth is driven by consumer enthusiasm for the iPhone 17 series.”

Moreover, in this quarter, Apple’s store traffic in China achieved double-digit growth year-over-year, with the number of installed base in Mainland China reaching record highs, upgrade and replacement users hitting historic levels, and new user conversions (from other platforms to Apple) also growing in double digits.

Multiple institutions’ data corroborate this performance. IDC data shows that in Q4 2025, China’s smartphone shipments were about 75.64 million units, a 0.9% decline YoY. Among them, Apple ranked first with 16 million units shipped, a 21.5% increase.

Counterpoint Research also reported that in Q4 2025, China’s smartphone shipments declined by 1.6% YoY, with an overall decrease of 0.6% for the year, but Apple’s shipments increased by 28% YoY in this quarter, with a market share of 22%, leading the Chinese smartphone market, thanks to the strong performance of the iPhone 17 series.

Regarding Apple’s recent success in China, besides the excellent performance of the iPhone 17 series, senior analyst Ivan Lam said that many external factors are at play, including the peak of the previous device replacement cycle, Mid-Autumn Festival sales extending into October, and the early start of “Double 11” promotions.

Recently, as the Year of the Horse Spring Festival approaches, Apple has launched New Year promotional activities on its official website and e-commerce platforms. The Apple Tmall flagship store shows that from 8:00 PM on January 25, 2026, to February 11, customers can enjoy discounts of up to 2000 yuan on selected products, with some regions stacking with national subsidies to save an additional 1500 yuan.

Memory Price Increase Will Impact Gross Margin

Due to the higher-than-expected demand for iPhones, Apple’s channel inventory at the end of this quarter was extremely low.

This indicates that Apple is facing supply constraints.

Ahead of this earnings report, market rumors suggested that Samsung Electronics and SK Hynix have negotiated with Apple to significantly raise prices for LPDDR chips supplied in Q1. Samsung’s increase exceeds 80%, while SK Hynix seeks about a 100% hike.

On January 28th, TFI Securities analyst Guo Mingchi discussed Apple and iPhone, focusing on the memory price increase issue. He stated that the memory prices for iPhones are now negotiated quarterly rather than semiannually, so Apple’s prices will likely rise again in Q2 2026, with the quarter-over-quarter increase in the second quarter expected to be similar to that of Q1 2026.

As predicted by external analysts, during the earnings call, how Apple will respond to memory price increases became a widely watched topic among investors and analysts.

Cook responded that memory costs had a negligible impact on gross margin in the quarter ending December (Q1 of FY2026), but are expected to have some effect on gross margin in Q2 2026. He acknowledged that memory market prices have continued to rise sharply, and Apple is considering multiple countermeasures. However, he did not elaborate on specific strategies.

In addition to memory, Cook mentioned that supply constraints mainly stem from capacity limitations of advanced process chips. This is a direct result of the 23% growth in the iPhone business, and the supply chain’s flexibility has been limited for some time, preventing large-scale supply increases on demand. Regarding supply prospects after Q2, Cook declined to comment, citing various industry factors.

Data shows that in 2025, iPhone shipments are expected to reach about 250 million units. As a major buyer in the memory market, Apple clearly holds a more advantageous negotiating position than other companies. Although specific pricing details remain confidential, industry insiders believe that these negotiations will significantly ease the imbalance between Apple and its memory suppliers.

Guo Mingchi believes that Apple’s current pricing strategy for the upcoming iPhone 18 in the second half of 2026 is “to avoid price increases as much as possible,” at least maintaining the initial price, which is beneficial for marketing.

In fact, thanks to strong brand premium, an integrated hardware-software ecosystem, and efficient supply chain management, Apple’s gross profit margin is significantly higher than its peers. Even if hardware gross margins are temporarily compressed, Apple can offset costs through other means—rising memory prices will impact iPhone margins, but with its large procurement scale and absorption capacity, Apple can increase market share and later recover costs through higher-margin services.

The confidence behind this strategy lies in the fact that in this quarter, Apple’s services revenue reached $30.013 billion, up 14% YoY, surpassing $30 billion for the first time, with segments like advertising, cloud services, and music setting records. More importantly, services are “easier” to profit from than hardware: the gross margin for services in this quarter was 76.5%, far higher than the 39.4% gross margin of hardware.