Apple posts record quarterly revenue on iPhone and services, warns AI and chip costs may squeeze margins
Technology giant Apple posted record revenue in the July-September quarter of this year as iPhone sales and services income rose. The company's revenue also beat analysts' forecasts.
However, the company said rising spending on artificial intelligence (AI) technology and memory chips could reduce its profit margin somewhat in the coming quarter. The information was reported by news agency AFP on Tuesday (November 3).
John Ternus published his first major financial report after taking over as chief executive officer (CEO) from Tim Cook last September. He said at the time, 'We are going to end the year with our most ambitious product lineup yet.'
Apple is optimistic about launching new products in the upcoming holiday season. Those products include the company's first foldable smartphone. The company expects sales of the new products to contribute to revenue growth.
Apple's chief financial officer (CFO) Kevan Parekh said the gross profit margin could fall because of higher memory chip prices and the cost of expanding Siri AI. The margin was 47.9 percent in the September quarter; in the next quarter it could drop to between 45 and 46 percent.
Parekh, however, dismissed concerns over AI investment, saying, 'We believe AI will create an important incentive for customers to buy new devices or replace old ones in order to get the benefits of new technology.'
After launching the iPhone 18 Pro, 18 Pro Max and the foldable Duo in September, Apple unveiled the Siri AI-powered smart display HomeView and a touchscreen MacBook Pro in October.
While rivals Microsoft, Alphabet, Amazon and Meta are spending hundreds of billions of dollars on AI infrastructure, Apple's capital expenditure is put at only 11 billion dollars. Despite keeping its own investment comparatively low, the company has taken strategies such as rebuilding Siri on the basis of Google's Gemini model.
In addition, Apple sued OpenAI, the creator of ChatGPT, which has been integrated into Apple products since 2024, in July alleging theft of trade secrets.
