Apple Poised for Strongest iPhone Growth in Years as Holiday Sales Surge, Google AI Partnership Looms

Apple Inc. is heading into its earnings report with significant momentum, as analysts forecast the company's best iPhone sales growth period since 2022. The October-December fiscal first quarter, encompassing the critical holiday season, is expected to showcase a consumer appetite for high-end devices that has defied broader market uncertainties.

According to consensus estimates, iPhone revenue is projected to surge approximately 13.8% year-over-year, driving total revenue to a record $138.43 billion—an 11.4% jump. This strength continues a trend from late 2025, where the latest iPhone series saw sales skyrocket, solidifying Apple's global smartphone market share gain to 20% in 2025, up from 18% the prior year. Notably, this demand surge occurred before the widespread rollout of anticipated on-device AI features, suggesting pent-up demand for hardware refresh cycles remains potent.

All eyes are now on Apple's next strategic move: integrating artificial intelligence. The company's planned implementation of AI features powered by Google's Gemini model is viewed by Wall Street as a capital-efficient way to rapidly enhance iPhone competitiveness without massive internal R&D overhead. "This partnership is a stopgap, but a smart one," said tech analyst Michael Chen of Horizon Insights. "It lets Apple catch up in the AI narrative immediately while it continues developing its own proprietary solutions behind the scenes."

Beyond hardware, Apple's services segment is forecast to grow 14.1%, and sales in Greater China—a crucial market—are projected to expand by about 15%. However, investors remain cautious about margins. A global shortage of memory chips is driving up component costs, posing a challenge to profitability despite an otherwise solid supply chain outlook. Year-to-date, Apple's stock has retreated 4.70%, reflecting these mixed pressures.

User Perspectives:

• Priya Sharma, Tech Portfolio Manager, New York: "The numbers are undeniably strong. The services growth and China rebound are the real stories here. The Google deal de-risks their AI roadmap and gives them time. I'm more concerned about the margin compression from component costs than about their innovation pipeline."
• David Keller, Independent Retail Investor, Austin: "Finally some good news! The iPhone upgrade cycle is clearly alive and well. I've been waiting for a catalyst, and this quarter plus the AI announcement might be it. The sell-off seems overdone."
• Marcus Thorne, Editor at 'The Circuit Breaker' Blog: "A 13% pop selling glorified camera bumps? This is peak 'innovation theater.' Their 'groundbreaking' AI plan is to rent it from Google? It's embarrassing. They're a luxury brand masquerading as a tech pioneer, and the margin pressure proves the model is fragile."
• Linda Gao, Student, San Francisco: "As a consumer, the AI features with Gemini are what would finally make me upgrade my older iPhone. The hardware is great, but it feels behind compared to what's out there. If they execute this well, it changes the game."