Apple Inc. forecasted a significant sales increase for the holiday season following the release of new iPhones, reassuring investors that the iPhone remains a key driver of growth. Revenue for the fiscal first quarter, ending in December, is expected to rise by 10 to 12 percent, according to Chief Financial Officer Kevan Parekh, surpassing analysts’ average projection of just 6 percent. "We expect double-digit iPhone revenue growth, which would make it our best iPhone quarter ever," he stated.

The positive outlook suggests Apple is navigating global challenges, such as trade tensions, weaknesses in China, and delays in developing AI features. In its latest iPhone release in September, Apple unveiled updated designs and introduced an ultrathin model called the Air. The iPhone continues to be Apple's top revenue source, contributing around half of the company's total income.

Apple's stock rose over 4 percent in after-hours trading, adding to an 8.4 percent year-to-date gain. In the fiscal fourth quarter, which ended September 27, sales grew by 7.9 percent to $102.5 billion, slightly exceeding the $102.2 billion estimate. Earnings per share rose to $1.85, surpassing the anticipated $1.77. The company benefited from stronger-than-expected growth in services, which helped offset a slowdown in China. The Mac and wearables divisions also performed better than expected. Tariffs added $1.1 billion in expenses during the quarter, in line with Apple's predictions, with an additional $1.4 billion in tariff costs expected in the December quarter. Operating expenses are projected to be between $18.1 billion and $18.5 billion.

Revenue from greater China fell 3.6 percent to $14.5 billion, missing analysts' expectations of $16.4 billion. The company faces intense competition from local smartphone brands and challenges in delivering AI features in the region. However, CEO Tim Cook remains optimistic that Apple will return to growth in China during the current quarter. iPhone revenue rose 6.1 percent to $49 billion, driven by the new models, although it slightly missed analysts' estimate of $49.3 billion due to supply constraints. Initial demand for the iPhone 17 appeared strong, with sellouts reported across retail and third-party channels. Buyers largely preferred higher-end iPhone 17 Pro models, which boosted Apple's average selling price. The new $999 iPhone Air, priced higher than its predecessor, also contributed positively.

Services continued to be Apple's fastest-growing segment, with a 15 percent increase in revenue to $28.8 billion, surpassing the $28.2 billion expected. Despite this, the services division faces challenges from regulators looking to alter App Store policies, potentially affecting software and subscription revenue. On a positive note, Apple recently won a legal battle when a judge declined to dismantle its $20 billion-a-year search deal with Google.

Mac revenue increased 13 percent to $8.73 billion, exceeding the $8.6 billion forecast. The company refreshed its MacBook Air and Mac Studio lines earlier this year and launched a new entry-level MacBook Pro recently. Meanwhile, iPad revenue remained flat at $6.95 billion, unchanged from the previous year, despite the release of new models. The wearables, home, and accessories division, which includes products like AirPods, smartwatches, and the HomePod, saw a slight decline of less than 1 percent to $9.01 billion, which was better than expected.

Once considered a key growth area, the wearables division peaked in 2021 with nearly $15 billion in holiday-quarter revenue. New products like the Vision Pro headset, recently upgraded with a faster chip, have struggled to gain traction. However, Apple may see renewed interest in the coming years with the introduction of smart glasses and new smart home devices.