iPhone strength lifts Apple past growth doubts

Apple’s March-quarter sales climbed sharply as demand for the iPhone 17 line helped the company deliver its strongest quarterly revenue growth in more than four years, easing investor anxiety over a slower consumer electronics market and its uneven progress in artificial intelligence.

The Cupertino-based group reported revenue of $111.2 billion for the fiscal second quarter ended March 28, up 17 per cent from a year earlier. Diluted earnings per share rose 22 per cent to $2.01, while net income reached $29.58 billion. The figures marked March-quarter records for total revenue, iPhone revenue and earnings per share, reinforcing the central role of the handset business even as Apple tries to broaden its growth engines.

iPhone revenue rose to $56.99 billion from $46.84 billion a year earlier, making the product line responsible for more than half of total sales. Tim Cook described demand for the iPhone 17 family as “extraordinary” and said Apple had achieved double-digit growth across every geographic segment. The performance indicated that customers were still willing to spend on premium devices despite higher living costs and a wider slowdown in discretionary technology purchases.

Services remained Apple’s second major pillar, rising to a record $30.98 billion from $26.65 billion. The segment, which includes the App Store, iCloud, Apple Music, Apple TV+, payments and other subscription businesses, continues to carry higher margins than hardware and has become a stabilising force when device cycles soften. Products generated $80.21 billion in sales, while services accounted for nearly 28 per cent of the group’s quarterly revenue.

Mac sales increased to $8.40 billion, helped by refreshed models and the launch of the lower-priced MacBook Neo. iPad revenue rose to $6.91 billion, supported by the M4-powered iPad Air. Wearables, Home and Accessories delivered $7.90 billion, up modestly from $7.52 billion a year earlier, showing a steadier but less dynamic performance than the iPhone and services divisions.

Apple also produced more than $28 billion in operating cash flow during the quarter. Its board approved a 4 per cent increase in the quarterly dividend to 27 cents a share and authorised an additional $100 billion in share repurchases. The buyback programme underlined the company’s continuing confidence in cash generation, though it also drew attention to questions over how much capital should be directed towards artificial intelligence infrastructure, acquisitions and product development.

Investors responded positively, with Apple shares rising after the results. The company also gave a current-quarter revenue outlook above market expectations, signalling that the momentum from the iPhone 17 line and services could extend into the June period. The guidance came as a relief for shareholders who had watched Apple trail some large technology peers during a year shaped by faster AI product rollouts elsewhere.

Cost pressure remains a significant concern. Higher memory prices and shortages of advanced processors have tightened supply across parts of the technology industry. Apple’s scale and long-standing supplier relationships give it leverage, but the company may still face pressure to raise prices or absorb lower margins if component costs continue to climb. The iPhone Pro and Pro Max models, where customers have shown greater willingness to pay, are likely to be central to that balancing act.

The results also arrived during a sensitive leadership transition. John Ternus, Apple’s hardware engineering chief, is set to take over as chief executive in September, with Cook moving to the role of executive chairman. Ternus told investors Apple had “an incredible roadmap ahead” and called it the most exciting period of his 25-year career at the company, without offering details on future devices or services.

Artificial intelligence remains the biggest strategic question. Apple has integrated AI features more cautiously than Microsoft, Alphabet and Meta, preferring to emphasise privacy, on-device processing and ecosystem integration. That approach has protected its brand, but delays to a more personalised Siri and limited visibility on broader AI plans have left investors looking to the Worldwide Developers Conference in June for clearer signals.