WASHINGTON, 29 JANUARY 2026 — Apple forecast stronger-than-expected revenue growth of up to 16% for the March quarter, driven by robust iPhone demand and a sharp rebound in Asia, particularly in China and India, easing investor concerns about a prolonged slowdown in hardware sales.
The outlook follows a better-than-expected holiday quarter, with Apple chief executive Tim Cook telling Reuters that demand for the company’s latest smartphones was “staggering.”
Apple said revenue in its fiscal second quarter is expected to grow 13% to 16%, exceeding analysts’ expectations of a 10% increase, according to LSEG data. The company also forecast operating expenses of US$18.4 billion to US$18.7 billion, slightly higher than spending in the fiscal first quarter.
Apple shares rose 3.5% in extended trading after the results were released, before paring gains to trade up about 0.8%.
The company’s iPhone 17 lineup helped lift sales across key markets in the fiscal first quarter ended December 27, helping to dispel fears that iPhone demand had reached a plateau. iPhone revenue rose to US$85.27 billion, well above analysts’ expectations of US$78.65 billion, with Apple saying iPhone sales set records in every geographic segment.
Before the earnings call, Cook told Reuters that iPhone revenue grew 23% year on year, delivering the biggest quarter in the product’s history. He added on the call that Apple gained market share in December, including against Android devices.
However, Apple cautioned that its outlook includes processor supply constraints affecting iPhone production. TSMC supplies Apple’s chips.
“We’re currently constrained. And at this point, it’s difficult to predict when supply and demand will balance,” Cook said, adding that Apple is seeing less flexibility in its supply chain than usual due to surging demand.
Apple forecast gross margin of 48% to 49% for the second quarter, compared with 48.2% in the first quarter, which exceeded both its own guidance and analyst expectations. Cook said a global memory chip shortage would have “a bit more of an impact” on margins in the second quarter.
“Beyond Q2, we do continue to see market pricing for memory increasing significantly,” he said, adding that the company would explore multiple options to manage higher costs.
The memory crunch has begun to ripple through the consumer electronics sector, exacerbated by a shift in chip production toward artificial intelligence applications. Samsung Electronics and SK Hynix, which together control about two-thirds of the global DRAM market and count Apple as a customer, warned that smartphone and computer makers would bear the brunt of worsening supply shortages.
Despite macroeconomic uncertainty, Apple reported quarterly revenue of US$143.8 billion, up 16% year on year, beating analysts’ average estimate of US$138.48 billion. Earnings per share came in at US$2.84, well ahead of the US$2.67 consensus, while Apple said its installed base reached 2.5 billion devices.
Demand in Greater China surged, with sales jumping 38% year on year to US$25.53 billion, far exceeding expectations. Cook said iPhone sales in China hit a record and that the iPhone 17 drove double-digit growth in users switching from Android devices. Demand in India also continued to accelerate, he said.
One weak spot was Apple’s wearables, home and accessories segment, where revenue of US$11.49 billion fell short of expectations. Cook said demand for the newly launched AirPods Pro 3, which can translate between languages, had caught the company off guard.
Earlier this month, Apple announced a partnership with Alphabet to integrate Gemini into Siri, and on Thursday said it had acquired AI startup Q.ai for US$1.6 billion, one of its largest-ever deals.
Source: Reuters
