TMTPost --  Apple Inc. recorded best-than-ever revenue for the September quarter, driven by a stronger-than-anticipated rebound of iPhone business, but sales in China, the world’s largest smartphone market, still fell shore of Wall Street expectation.

Credit：Apple

Apple said its revenue for its fourth fiscal quarter ended September 28 gained 6.1% year-over-year (YoY) to $94.93 billion, reaching new all-time high for the September quarter. The record revenue also beat analysts’ projection of $94.36 billion. Net income that quarter slumped 35.8% YoY to $14.74 billion, and diluted earnings per share (EPS) fell 33.6% YoY to $0.97 due to  the one-time charge recognized during the fourth quarter of 2024 related to the impact of the reversal of the European General Court’s State Aid decision. Apple has been ordered to pay Ireland  €13bn, or more than $14 billion, in unpaid taxes by European top court. The company paid a one-time tax charge of $10.2 billion during the September quarter. Excluding the one-time tax charge, EPS rose 12.3% YoY to $1.64, ahead of analysts estimated $1.58.

The business of iPhone, Apple’s most important product, brought a surprise for the September quarter. iPhone sales climbed 5.5% YoY to $46.22 billion, whereas analysts projected to add 2.8% YoY to $45.04 billion. That sales reversed a 0.9% YoY decline for the previous quarter.

In spite of iPhone sales beat, Apple business in China disappointed Wall Street. Revenue from Greater China edged down 0.3% YoY to $15.03 billion, missing analyst’ forecast of $15.8 billion. Sales in Greater China remained YoY drop this year, while analysts expected sales snapped the straightful quarterly decline for the September quarter, in which Apple just released its latest flagship iPhone 16 series.

Apple introduced on September 9 the new iPhone 16 lineup, built from the ground up for Apple Intelligence,  its advanced personal AI system introduced at the Worldwide Developers Conference (WWDC) this year in June. The latest iPhone series feature the faster, more efficient A18 and A18 Pro chips, making these the most advanced and capable iPhone models ever.The AI features are deemed as a major selling point of iPhone 16.

The first set of Apple Intelligence features for iPhone users was available first for US English in October. In December, users will have the option to access ChatGPT's knowledge within Writing Tools and Siri, allowing them to benefit from its image- and document-understanding capabilities without needing to jump between tools. However, it’s still unclear when Apple Intelligence can be available for users in China.

 "We are working hard to push it forward. There is a very strict regulatory process we need to go through, and we hope to bring it to Chinese consumers as soon as possible," Cook responded to a question about when Apple will launch Apple Intelligence in China during his visit to the country last week.

Sales of the iPhone 15 were “stronger than 14 in the year-ago quarter, and 16 was stronger than 15,” Apple CEO Tim Cook told CNBC following the quarterly earnings Thursday.  

Cook said the company was looking forward to Apple Intelligence, the AI system for iPhones and Macs that started to roll out this week as part of the iOS 18.1 update.  Within the first three day since the iOS update, users are adopting iOS 18.1 at twice the rate that they adopted 17.1 in the year-ago quarter, Cook noted.

Apple Chief Financial Officer (CFO) Luca Maestri gave a cautious outlook for the current quarter. She said at an earnings call that Apple expects December quarter revenue to grow at a “low to mid single digits” YoY rate. That would be a slowdown for Apple compared with a 6.1% YoY rise in revenue for the past quarter. That is also a miss given Wall Street's forecast for $127.7 billion in revenue, implying a YoY increase of 7%.