Apple’s upbeat forecast after ‘staggering’ iPhone demand clouded by soaring memory costs

Los Angeles – Apple delivered record quarterly sales and a better-than-anticipated forecast for the current period, even as the company warned that rising component costs are threatening to squeeze margins.

Revenue will rise 13 per cent to 16 per cent in the second quarter, which runs until March, the company said on Jan 29 during a conference call with analysts. That exceeded the 10 per cent projected by Wall Street – showing that Apple can maintain momentum after an iPhone-fuelled sales surge in the December quarter.

Still, the spectre of rising memory prices clouded the results. After a minimal effect last quarter, the company expects “more of an impact” to gross margins in the current period, said chief executive Tim Cook. “We do continue to see market pricing for memory increasing significantly,” he said.

The concerns weighed on Apple shares, which fluctuated in late trading after the results were released. They were up about 1 per cent as at 5.39pm in New York. The stock had been down 5 per cent in 2026, compared with a 1.8 per cent gain for the S&P 500 Index.

Revenue during the holiday season trounced Wall Street estimates, driven by strong demand for the new iPhone 17, growth in services and a rebound in China.

iPhone revenue rose to US$85.27 billion (S$108 billion) in the fiscal first quarter ended Dec 27, 2025, well above the US$78.65 billion analysts had expected. Apple said iPhone sales set records in every geographic segment, highlighting broad-based demand despite macroeconomic uncertainty.

“The demand for iPhone was simply staggering, with revenue growing 23 per cent year over year to achieve its biggest quarter in history,” Mr Cook told Reuters in an interview. 

Apple’s total first-quarter revenue jumped 16 per cent to US$143.8 billion, beating the US$138.4 billion average forecast, according to data compiled by Bloomberg.

The results reflected the success of Apple’s latest iPhone, a product line that accounts for roughly half its revenue. Higher-end versions of the device have been especially popular, helping further fuel sales and profit for the company.

But there were weak spots in the quarter, including Apple’s Mac and wearables businesses. The company is also facing concerns about its artificial intelligence push, which is getting an overhaul in 2026 after recent stumbles. And Apple is coping with tariffs, which it previously said would create a US$1.4 billion headwind in the holiday period.

Apple regained its title as the No. 1 smartphone seller globally in recent months, overtaking Samsung Electronics.

“Yet maintaining that dominance is perhaps more uncertain than ever, hinging on the right calls around pricing and developing the next generation of devices, particularly wearables and the anticipated foldable iPhone,” Emarketer analyst Jacob Bourne said in a note. BLOOMBERG, REUTERS