Apple Reports Soft iPhone Sales In Holiday Quarter, But Still Tops Wall Street Forecasts

Core Insights - Apple reported a 4% year-over-year revenue increase for the holiday quarter, reaching $124.3 billion, surpassing Wall Street forecasts for revenue and earnings per share [1] - Earnings per share reached $2.40, significantly exceeding consensus estimates [1] - Product revenue grew by 1.6% to nearly $98 billion, while services revenue rose by 14% to $26.3 billion [2] iPhone Sales Performance - Sales of the iPhone 16 have been weaker than anticipated since its launch in September 2024, with the iPhone still accounting for about half of Apple's revenue [3] - The introduction of a new, cheaper SE model has been delayed, which is intended to encourage more frequent upgrades and potentially include new AI features [3] Market Position and Strategy - Apple holds a market capitalization of $3.6 trillion, making it the most valuable company globally, although this ranking is subject to change [4] - Compared to other Big Tech companies, Apple is investing less in AI infrastructure but is focusing on enhancing device capabilities through its Apple Intelligence initiative [4] - CEO Tim Cook remains optimistic about the company's AI efforts, emphasizing the potential unlocked by Apple silicon [5] Financial Performance and Shareholder Returns - The company achieved record revenue and strong operating margins, leading to an all-time high in earnings per share with double-digit growth [6] - Over $30 billion was returned to shareholders, and the installed base of active devices reached a new all-time high across all products and regions [6]