- Apple posted its best-ever fiscal year for revenue and earnings per share, with iPhone revenue rising 17.5% to $57.6 billion and Mac revenue climbing 24% to $10.8 billion.
- Shares of Apple are up 1.4% in the past month as of Monday's close.
- Apple shares fell in premarket trading after warning that rising memory costs would squeeze holiday quarter margins.
- During the earnings call, John Ternus stated, 'We see tremendous opportunity in AI,' with AI mentioned a record 45 times.
- CFO Kevan Parekh highlighted a 'wide range of ways that AI can contribute to revenue growth over time.'
- Apple launched a revamped Siri AI in beta for US English in September and expanded it to more languages in October.
- Earlier this year, Tim Cook noted that customer recognition of the Mac Mini and Mac Studio capabilities for AI was happening faster than Apple had predicted, leading to higher-than-expected demand.
- OpenAI has begun directing potential subscribers to pay through its website instead of the App Store, bypassing Apple's commissions.
Apple has positioned itself as a unique player in the AI landscape, focusing on on-device processing and selective partnerships rather than heavy infrastructure investments. CFO Kevan Parekh highlighted AI's potential for revenue growth, stating, “On the product side, we feel AI offers a compelling reason for customers to upgrade.”123568
Despite a record fiscal year, with iPhone revenue rising 17.5% to $57.6 billion and Mac revenue climbing 24% to $10.8 billion, shares fell due to concerns over rising memory costs impacting holiday profit margins. Apple spent $2.2 billion on capital expenditures last quarter, significantly less than competitors like Amazon and Alphabet, which spent $77.3 billion and $51.4 billion respectively.
During the earnings call, AI was mentioned a record 45 times, reflecting its growing importance to Apple’s strategy. CEO John Ternus noted, “We see tremendous opportunity in AI,” emphasizing the company’s focus on enhancing user experience through AI-driven features.4
Apple's approach includes a mix of on-device processing and cloud capabilities, with plans to monetize expanded access to server-side features in the future. As Apple navigates rising costs, its ability to leverage its vast user base of 2.5 billion active devices will be crucial for sustaining growth in the competitive AI market.
“AI was mentioned a record 45 times on the earnings call, with CEO John Ternus touting opportunities. Apple's CapEx last quarter was $2.2 billion versus Amazon's $77.3 billion, but operating expenses rose 21% to $19.2 billion as R&D spending increased.”
