Apple Hits iPhone Sales Records as Mac Numbers Slide

Apple just wrapped up what might be its strongest iPhone quarter ever, pulling in massive sales during the final three months of 2024. The California-based tech giant brought in $144 billion (£82.5 billion) between October and December, thanks largely to iPhone sales that exceeded expectations across China, Europe, the Americas, and Japan.

But it wasn't all good news. Apple's other products didn't quite keep pace. The wearables category think Apple Watches and AirPods dipped about 3%, while Mac sales took an even bigger hit, falling just over 7% from last year.

CEO Tim Cook told investors the company is basically scrambling to keep up with iPhone demand right now. "We're trying to catch up with really high customer demand, and honestly, we're stretched thin," Cook said during Thursday's earnings call. The iPhone 17 has been a particular standout, with demand that "blew past what we expected and that's putting it mildly," according to Cook. He pointed out that India had its best quarter ever for iPhone sales.

When analysts pressed him about Apple's new deal with Google where Google's Gemini AI will power future Apple intelligence features and beef up Siri Cook didn't give much away. It's a separate arrangement from the existing partnership where Google handles search for Safari.

Looking ahead, Apple plans to spend $16 billion next year on growing its business, including new stores and backend systems. Compare that to Microsoft, which dropped more than $37 billion in its last quarter alone, mostly chasing AI opportunities. Apple's approach looks downright cautious by comparison.

Wall Street's getting nervous about Microsoft's AI spending spree, especially since the revenue hasn't caught up yet. After Microsoft reported earnings Wednesday, its stock nosedived 10% on Thursday, marking the worst single-day drop in four years. Industry watcher Jacob Bourne from Emarketer thinks Apple's smartphone dominance isn't as guaranteed as it used to be. "They really need to make this Google partnership work and turn Siri into something people actually want to use and something that makes money," Bourne said. The pressure's on for Apple to prove it can stay ahead without breaking the bank on AI like its competitors.