Apple’s AAPL latest iPhone 17 series is a hit in China, with October sales jumping 37% year over year per Counterpoint data. Greater China, which accounted for 15.5% of fiscal 2025 net sales, dropped 4% over fiscal 2024 to $64.38 billion due to lower net sales of iPhone, partially offset by higher Mac sales.
The updated iPhone portfolio is expected to boost iPhone sales. For fiscal 2025, iPhone sales ($209.59 billion) accounted for roughly half of the total sales ($416.16 billion) and climbed up 4.2% from fiscal 2024, better than the flat growth in 2024 from 2023 and a decline of 2% in 2023 from 2022. The popularity of the iPhone 16 series drove sales in fiscal 2025 despite facing stiff competition from Chinese vendors and Samsung, headwinds related to Apple Intelligence, and tariff issues.
Apart from the iPhone, Mac and Services businesses are driving Apple’s sales in China. Apple launched a new store in China, which expanded the company’s footprint in the fourth quarter of 2025. Apple reported record September quarter Services sales in Greater China.
Apple now expects the December quarter’s (first-quarter fiscal 2026) iPhone sales to grow in double digits year over year. The company expects the iPhone to drive China sales in the current quarter. New Apple Intelligence features like Live Translation, which help users communicate across languages in real time, and visual intelligence, which opens new ways to learn about and explore the world, are notable additions.
AAPL is playing catch-up to the likes of Alphabet GOOGL and Microsoft MSFT in the AI space. Alphabet’s initiatives to integrate AI across its search and cloud solutions and an expanding focus on improving its enterprise footprint (through the launch of Gemini Enterprise) are expected to boost prospects. It has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance.
Microsoft’s AI business has achieved a remarkable milestone, surpassing a $13 billion annual revenue run rate, representing 175% year-over-year growth. This performance underscores Microsoft’s strategic positioning at the intersection of cloud infrastructure and AI, two sectors expected to drive technology spending through the remainder of the decade. Microsoft’s Fairwater is the world’s most powerful AI datacenter in Mount Pleasant, Wisconsin, with a total commitment exceeding $7 billion.
Apple shares have returned 16.5% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 23.8%.