Apple CEO Tim Cook introduced the iPhone 16 last month, highlighting its “supercharged” capabilities through Apple Intelligence AI tools. One month after the launch, the first sales figures offer insight into the device’s market impact.
For the quarter ending in September, Apple reported $46.2 billion in iPhone sales, surpassing analysts’ expectations. This marks a 5.5% year-over-year increase, though only two weeks of iPhone 16 sales were included. Preorders opened on September 13, with the official launch on September 20, providing an early glimpse of consumer demand. Apple hopes the iPhone 16 will reverse its years-long sales slump.
Apple has faced four consecutive quarters of declining revenue, driven by weaker iPhone demand and economic uncertainty. Analysts suggest the AI-powered Apple Intelligence update could spark a much-needed sales “supercycle.”
Sales Performance and Analyst Expectations
The recent iPhone sales also include older models, with the iPhone 16 contributing a modest boost. In the same quarter last year, iPhone sales increased by 2.8% following the iPhone 15 launch. This year’s 5.5% growth helped Apple’s overall revenue rise 6% year-over-year to $94.9 billion, slightly above projections. However, profits fell 35% compared to the previous year.
During the earnings call, Tim Cook highlighted the success of Apple Intelligence, noting iOS 18.1 had double the adoption rate of its predecessor. Despite these gains, Apple shares (AAPL) fell by 1% in after-hours trading.
Apple recently launched its first Apple Intelligence features for the iPhone 16 and iPhone 15 Pro models. These include new writing tools and the ability to record, transcribe, and summarize calls. Early iPhone 16 buyers, however, only gained access to these features this week. More AI tools are expected with iOS 18.2 in December, which may delay some consumers’ decision to upgrade.
The Role of International Markets and Future Outlook
Investors have been closely watching early signs of the iPhone 16’s performance and Apple’s outlook for the fourth quarter. Tim Cook described Apple Intelligence as setting “a new standard for privacy in AI” and a driver for the holiday season lineup.
China remains a critical market for Apple, though challenges persist. Despite cutting prices earlier this year, third-quarter sales in China were flat year-over-year at just over $15 billion, falling short of the $16.1 billion analysts predicted. Local competition and a slower rollout of Apple Intelligence features may have hindered growth.
Still, analysts remain optimistic about the holiday season. Wedbush analyst Dan Ives noted that about 300 million iPhones globally haven’t been upgraded in over four years. This pent-up demand could lead to a “monster holiday season” for Apple.
Emarketer analyst Jacob Bourne added that while the gradual Apple Intelligence rollout might slow immediate upgrades, strong services revenue growth and solid iPhone 16 demand position Apple well for the coming months.