Apple’s $111bn quarter fueled by 28% China surge

Apple Inc. posted revenue of $111.1 billion in its latest quarter, powered largely by a sharp rebound in Greater China, where sales jumped 28 percent, even as the company faced ongoing supply chain constraints.

The results mark one of Apple’s strongest March-quarter performances, underpinned by resilient demand for iPhones and steady growth across its services business.

The iPhone maker reported revenue of $111.1 billion for its fiscal second quarter, up 17 percent from a year earlier and above analysts’ expectations. Net income rose by the same margin to $29.5 billion, underscoring resilient consumer demand across its product lines.

Sales of iPhones, led by the latest iPhone 17 series, climbed 22 percent year-on-year to $56.9 billion, slightly below market forecasts but still marking a March quarter record. Cook said customer response to the new devices had been extraordinary.

China emerged as a major growth driver, with revenue in Greater China jumping 28 percent to $20.4 billion, beating analyst estimates. Cook noted the iPhone was the top-selling smartphone in urban China, signalling a strong rebound in a market that has recently posed challenges for foreign tech firms.

Services revenue, which includes subscriptions and digital offerings, reached an all-time high of $30.9 billion, up 16 percent. Chief Financial Officer Kevan Parekh said Apple’s installed base surpassed 2.5 billion active devices, providing a strong foundation for future recurring revenue.

Despite the upbeat performance, Cook warned that supply constraints, linked to limited availability of advanced semiconductor nodes, continued to affect production, particularly for iPhones. He said the issue was not related to memory shortages and is expected to persist into the current quarter.

The results highlight Apple’s enduring ecosystem strength but also point to new strategic pressures. Paolo Pescatore of PP Foresight noted that while iPhones remain central, services are increasingly driving growth, and China has become a key swing factor for performance.

Attention is also turning to Apple’s artificial intelligence strategy. Cook said the company’s collaboration with Google on Gemini AI models is progressing well, alongside internal efforts to build its own systems. Analysts argue that Apple must better integrate AI across its devices and services to sustain long-term growth.

The earnings call comes ahead of a leadership transition, with Cook set to step down on 1 September 2026. John Ternus, Apple’s senior vice president of hardware engineering, will take over as CEO, while Cook moves into the role of executive chairman.

Cook expressed strong confidence in his successor, calling Ternus the right leader for Apple’s next phase. Ternus, in turn, described the company’s product roadmap as the most exciting in his 25-year career.

The incoming CEO faces immediate challenges, including navigating supply chain risks, intensifying competition in China, and accelerating Apple’s AI ambitions, even as the company posts record-breaking results at the end of Cook’s tenure.