Apple is expected to post its fastest iPhone sales growth in more than four years, on Thursday, resulting from strong demand for high-end Pro models and a strategy that leans on Google rather than expensive in-house development.
Analysts expect iPhone revenue to have increased by nearly 14% in the October to December quarter, Apple’s fiscal first.
That would be its best performance since 2020. Total revenue is forecast to have climbed more than 11% to a record $138.4bn, with services once again doing much of the heavy lifting.
The iPhone 17 cycle has turned into what analysts now call a “supercycle”, the strongest since the iPhone 12 era. Sales surged in the final quarter of 2025, helped by upgraded cameras, more storage and a renewed focus on premium devices.
In China and several emerging markets, buyers gravitated towards the Pro models despite a tougher consumer backdrop.
Apple’s decision to rebuild Siri and other new features around Google’s Gemini models is its biggest strategic shift in years. Rather than focusing on raw spending, Apple is choosing distribution over infrastructure.
Wall Street has welcomed the move. “The Google deal should demonstrate to the market the iPhone will remain the consumer device of choice for accessing new AI tools,” Goldman Sachs analysts said.
This approach allows Apple to lean on an installed base of more than two billion devices without joining the spending spree that has seen Microsoft, Alphabet and Amazon pledge more than $500bn to advanced computing and data centres.
Apple’s own share price rose just 8.5% last year, trailing competitors caught up in the market’s technology rally. However, some investors believe limitation could be a strength, not a weakness.
“Apple can probably generate a positive return on very little AI investment, thanks to its distribution,” said Gerrit Smit, manager of the Stonehage Fleming Global Best Ideas Equity fund.
On market share, Apple ended last year as the world’s largest smartphone maker, holding 20% of global sales, up from 18% a year earlier. Growth in Greater China is expected to have reached around 15%, according to analyst estimates.
Still, risks are piling up. A global shortage of memory chips is constricting supply across consumer electronics, from phones to gaming consoles. Higher component prices could squeeze margins as Apple heads into its second fiscal quarter.
“But Apple has shown great skill in navigating supply chain disruption,” Rosenblatt Securities said. “We expect the playbook to include using its market-leading scale to pressure suppliers for concessions and to lock in supplies.”
Apple’s services business, which includes the App Store and payments, is also facing issues with Europe’s regulators over competition and pricing.
The company has already paid hundreds of millions of euros in fines, and further action could slow growth in a segment that investors see as essential to long-term earnings.
