- Apple enjoys China resurgence after difficult few years, with iPhone sales going through the roof
- Beats earnings expectations for 12th quarter in a row
- Questions remain over Apple’s innovation and lack of new product with mass-market appeal
Dan Coatsworth, head of markets at AJ Bell, comments:
“Apple’s iPhone has reconnected with Chinese consumers after a difficult few years amid intense competition from local handset providers.
“Its latest results show a breakthrough in China, driven by two potential reasons. The iPhone 17 launch seems to have resonated with the public and had enough bells and whistles to lure people into upgrading their handsets.
“China’s stock market also had a great run in 2025, and retail investors frequently participate in buying and selling shares. It might be that individuals made a mint on the stock market and used some of the profits to go on a spending spree. It’s perhaps no coincidence that luxury goods names like Burberry and LVMH have also recently reported a pick-up in Chinese sales.
“Phone manufacturers are in the habit of launching new variations of best-selling handsets, making incremental changes to features in the hope people ditch their old device and get the new model. That worked for a while, but in recent years there has been buyers’ fatigue and users have opted to keep existing handsets for longer.
“Apple makes a song and dance out of every new iPhone launch, typically promising upgrades from a menu of camera improvements, longer battery life, faster performance, shape, size, and more. The iPhone 17 ticks many of these boxes and for once there seems to have been enough enhancements to tip people over the edge and hit the ‘buy’ button.
“While the iPhone’s success has dominated the latest results, don’t forget that Apple is a multi-faceted beast. Its services arm is the company’s secret sauce, providing recurring revenue and locking people into its ecosystem. This steady stream of money gives Apple many options such as reinvesting in the business, funding share buybacks and making acquisitions.
“Apple has just bought start-up Q.AI whose technology is used to analyse facial expressions, potentially enabling customers to have non-verbal interactions with an AI assistant. This looks like a tomorrow’s world scenario and perhaps not an immediate money-maker. It doesn’t solve the problem that Apple feels it has lost its mojo when it comes to mainstream innovation.
“It needs a new product that could be snapped up by millions of people and sit alongside the core range of iPhones, iPads, MacBooks and watches. The Vision Pro headset is its only major new product launch for a long time and that hasn’t taken off on a grand scale.”
