Apple Inc. posted its strongest March quarter ever on Thursday, with revenue climbing 17% to $111.2 billion and net income hitting $29.6 billion. iPhone sales powered the results, reaching $57 billion despite a supply snag that left potential revenue on the table. CEO Tim Cook called demand for the iPhone 17 lineup “extraordinary,” telling analysts on the earnings call it marked the most popular family in company history from launch through March.
But. Supply chains tightened. Cook explained to Reuters that “demand was off the charts,” yet advanced processor nodes proved scarce. TSMC, Apple’s sole chip supplier for iPhones, faces surging orders from the AI rush. Once Apple’s dominant customer, the iPhone maker now shares the queue, eroding its pull. Gross margins held at 49.2%, beating forecasts, thanks in part to high-margin services.
The iPhone 17 Pro and Pro Max led the pack. Their orange hue and aluminum redesign drew crowds. Even the base model impressed, packing ProMotion and always-on displays for the first time. A budget iPhone 17e, launched in March, broadened appeal. Upgraders and first-time buyers surged; the active installed base hit a record, with double-digit growth across the U.S., Greater China, Western Europe, India, Japan, and Southeast Asia, per CFO Kevan Parekh on the call.
Supply Bottlenecks Echo Beyond iPhones
Constraints didn’t stop at phones. Macs shone too, with revenue up on the new MacBook Neo’s pull. Cook described that demand as “off the charts,” outpacing forecasts and tying up memory components. The division set a March record for new customers. Services hit an all-time high, growing 16%, while every geographic segment expanded double digits—including Greater China.
Apple authorized a $100 billion stock buyback, signaling confidence. Earnings per share rose 22% to $2.01, topping estimates. Yet shares dipped slightly after hours. Investors eyed headwinds: memory costs and the CEO transition.
Tim Cook steps down in September after 15 years, handing reins to hardware chief John Ternus. The earnings call marked Ternus’s first public remarks as successor. Cook praised the iPhone 17 family as the “most popular lineup in our history,” crediting Ternus’s teams. Analysts see a smooth shift; Ternus drove the iPhone 17 and MacBook Neo hits.
China rebounded sharply. iPhone growth there outpaced other regions, fueled by e-commerce deals and subsidies. Worldpanel surveys showed iPhones topping charts in urban China, the U.S., U.K., Australia, and Japan. India emerged as a bright spot too—Cook called it the world’s second-largest smartphone market and third for PCs.
Challenges loom. AI chip demand strains TSMC’s 3nm process, used for Apple’s A19 and A19 Pro—soCs in the iPhone 17. Broader memory shortages could pinch margins next quarter. Cook warned of ongoing Mac limits. Still, operating cash flow hit $28.7 billion.
Ternus Era Dawns on Solid Ground
Wall Street expected $109.66 billion in sales and $1.95 EPS. Apple crushed both. iPhone revenue slightly missed at $56.99 billion versus $57.21 billion hoped, but Cook stressed supply—not softness—held it back. Services beat at $30.98 billion.
The quarter caps a banner run. iPhone upgraders set records. Market share grew, per surveys. As Ternus takes over, he’ll inherit a demand machine tempered by production realities. Investors watch WWDC for AI updates; partnerships like Google’s Gemini for Siri loom large.
Cook’s tenure ends strong. Demand roars. Supply catches up slowly. Apple’s machine hums—poised for whatever comes next.
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