Apple's iPhone sales surge to new quarterly high despite early missteps
in artificial intelligence
[January 30, 2026] By
MICHAEL LIEDTKE
Apple’s iPhone sales soared to a new quarterly record during the holiday
season, despite artificial intelligence blunders that prompted the
technology trendsetter to get a helping hand from Google.
The October-December results announced Thursday reflect the allegiance
of Apple’s fans, who eagerly snapped up the latest iPhone 17 models even
though the company still hasn’t delivered on its 2024 promise to smarten
up the device’s Siri assistance with AI.
Apple tried to offset its AI miscues with a new “liquid glass” design
for the iPhone 17 and older models installed by way of a free software
upgrade released last September. That formula helped produce iPhone
sales of $85.3 billion, a 23% increase from the same time in the
previous year. It marked Apple's highest iPhone sales for a three-month
period since the device’s debut in 2007.
“The demand for iPhone was simply staggering,” Apple CEO Tim Cook crowed
during a conference call with analyst while predicting the device will
become a cutting-edge platform for AI.
The iPhone’s robust performance propelled Apple to a profit of $42.1
billion, or $2.84 per share for the quarter, a 16% increase from the
previous year. Total revenue also rose 16% from the previous year to
$143.8 billion. Both the earnings and sales exceeded the analyst
projections that steer investors.
Apple’s shares rose by about 1% in extended trading after the numbers
came out. But the stock price still remains slightly down so far this
year, and isn't that much higher from where it finished at the end of
2024.
Zacks Investment Research analyst Ethan Feller said the worries about
Apple's late start in AI appeared to have been overblown and now appears
well positioned to roll out more of the technology “as a feature that
scales naturally across its ecosystem,” which also includes iPads, Mac
computers and smartwatches in addition to iPhones. Apple said more than
2.5 billion active devices worldwide are now running on its various
operating systems.
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An Apple logo adorns the facade of the downtown Brooklyn Apple store
on March 14, 2020, in New York. (AP Photo/Kathy Willens, File)
 The Cupertino, California, company
will try to sustain the momentum by finally releasing a batch of
delayed AI features, including an Siri upgrade that is supposed to
make the assistant more conversational and versatile.
To pull it off, Apple is tapping into Google’s latest AI model,
Gemini 3, in a tacit acknowledgment of its own shortcomings in a
technology that’s widely considered to be the industry’s biggest
breakthrough since the iPhone’s introduction.
Despite its AI deficiencies, the iPhone ended last year as the
worldwide sales leader with a nearly 20% market share that ranked
just ahead of Samsung, according to the research firm International
Data Corp.
In a show of its confidence, Apple forecast its revenue for the
January-March period will climb by at least 13% from last year,
above the roughly 10% bump that analysts had been anticipating.
The AI boom is confronting Apple with another challenge: a shortage
of memory chips that for smartphones and laptops amid the voracious
demand for the same processors in the massive data centers that are
being built to power AI features.
Besides threatening to curtail iPhone production, the memory chip
crunch is also driving up their prices — a factor that has already
been eroding Apple’s profit margins. That financial pressure could
eventually push Apple to raise the prices on iPhones and other
products to help offset the rising memory chip costs
“We do continue to see market pricing for memory increasing
significantly,” Cook told analysts Thursday. “As always, we’ll look
at a range of options to, to deal with that.”
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