Apple races to meet rising iPhone 17 demand amid supply constraints

WEB DESK: Apple has projected stronger-than-expected iPhone sales and overall revenue for the holiday quarter, driven by high demand for its latest iPhone 17 models, Chief Executive Tim Cook announced on Thursday. The tech giant is racing to fulfil orders amid ongoing supply constraints, particularly affecting shipments to China.

The company’s fiscal fourth-quarter results highlighted the challenges of meeting demand. iPhone sales fell short of forecasts due to production bottlenecks and delays in shipping the new devices to China.

However, this shortfall was offset by growth in other areas, including the launch of AI-powered AirPods capable of translating languages. Apple’s profit also exceeded Wall Street expectations, sending its shares up 3.7 percent in after-hours trading.

Cook told Reuters that he expects iPhone sales to grow by double digits in the holiday-focused first quarter of fiscal 2026. Overall revenue is forecast to rise between 10 and 12 percent year over year, surpassing analyst estimates of 9.8 percent iPhone growth and 6.6 percent total revenue growth.

China delays and supply constraints

The Cupertino-based company struggled to meet demand for several iPhone 17 and iPhone 16 models during the last quarter. The launch of the iPhone Air, Apple’s thinnest device yet and its most significant redesign in years, was delayed in China due to regulatory issues with its e-SIM-only connectivity. Cook described this delay as the main reason for slower sales in China but said he remains optimistic about the market.

“However, we are very enthusiastic about China,” Cook said. “We love the response to the new products there, and we expect to return to growth in Q1.” He added that supply constraints are still affecting several iPhone 17 models, but the company is fulfilling orders as quickly as possible.

Despite Apple’s late start in shipping new models, analysts say demand remains strong. Ryuta Makino of Gabelli Funds noted that base and Pro iPhone models performed better than expected, although initial iPhone Air sales were weaker.

Broader growth and AI progress

Apple’s results also eased concerns about its exposure to U.S.-China trade tensions and delays in artificial intelligence developments. Tariff-related costs of $1.1 billion were in line with forecasts, while CFO Kevan Parekh expects $1.4 billion in tariffs for the current quarter, keeping gross margins between 47 and 48 percent.

Cook confirmed that significant upgrades to Siri, Apple’s virtual assistant, are expected next year. “We are making good progress,” he said, signalling the company’s intent to strengthen its AI capabilities.

Sales in Apple’s services segment, including Apple TV and its film business, reached $28.75 billion, surpassing estimates. Mac and iPad sales also beat projections, while the accessories business, including AirPods and Apple Watch, performed strongly at $9.01 billion, above expectations.

With the holiday season under way, Apple is counting on a mix of new and improved products to sustain growth. The company’s ability to overcome supply hurdles while rolling out innovative hardware and software will be critical to converting strong demand into lasting momentum.