iPhone sales jump, but Apple faces cost strain

Apple reported strong results for the December quarter, driven by massive demand for iPhones, whose sales jumped 23% to $85.3 billion as many customers upgraded to the new iPhone 17 models. 

This helped Apple post record quarterly revenue of nearly $144 billion, beating Wall Street estimates. Sales were especially strong in China, where demand had been weak in recent years.

Revenue in China jumped from $18.5 billion to $25.5 billion year over year. India also posted standout growth, with Apple recording its highest-ever quarterly revenue in the country.

Apple’s overall product sales jumped in all regions, including the Americas.

Apple now has more than 2.5 billion active devices worldwide, up from 2.35 billion a year ago. 

Despite the strong results, Apple’s stock stayed mostly flat because investors are worried about rising costs.

Prices for key components such as memory, storage, and chips are rising as AI companies buy up large supplies.

CEO Tim Cook said the company is facing supply constraints and higher component costs. Analysts believe Apple will absorb these costs instead of raising iPhone prices next year, which could hurt profit margins.

Some positives remain. A US tariff cut on Chinese imports helped reduce costs, and more customers are buying high-end Pro models. Apple also expects revenue to grow 13% to 16% next quarter, beating expectations.