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Apple delivered largely better-than-expected financial results for the three months that ended in September, despite being caught in the midst of a global trade war, and scrambling to catch up to its Big Tech peers in the artificial intelligence race.

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The performance announced on Thursday was driven largely by strong initial demand for its iPhone 17 line-up that went on sale last month.

“Today, Apple is very proud to report a September quarter revenue record of $102.5 billion, including a September quarter revenue record for iPhone and an all-time revenue record for Services,” said Tim Cook, Apple’s CEO.

Buoyed by the iPhone results, Apple earned $27.5bn (€23.8bn), nearly doubling its profit from a year ago. Apple shares rose 2% in extended trading after the results were released.

Although the iPhone 17 lacks the AI wizardry featured in rival devices recently introduced by Samsung and Google, Apple spruced up its latest models with a redesign highlighted by a sleek "liquid glass" appearance on the display screens.

Apple also largely maintained its pricing on its latest iPhones, despite being squeezed by the tariffs that President Donald Trump has imposed on its US-bound devices, which the company mainly manufactures in India and China. The tariffs cost Apple $1.1bn (€950m) during the past quarter and are expected to cost another $1.4bn (€1.2bn) during the final three months of the year.

The formula apparently was enough to win over consumers, particularly in the United States and Europe, helping to produce iPhone sales totalling $49bn (€42.4bn) during the July-September period, a 6% increase from the same time last year. That was slightly below the 8% jump in iPhone sales that had been anticipated by analysts, and less than the 13% rise in sales during the April-June period.

According to Ben Barringer, global head of technology research at Quilter Cheviot, "Mac sales were up 12%, while iPhone sales rose around 6%. However, iPad and wearables were flat." He added that "weakness in China was a drag, with sales down 4% as the company cited forecasting issues and self-imposed supply constraints."

IDC estimates that 58.6 million iPhones were sold worldwide in the July-September quarter, putting Apple second behind Samsung, which sold 61.4 million Android-powered phones.

As for the entire fiscal year that Apple concluded at the end of September, the company reported a record net income of $112 billion (€96.8bn), up 20% from the previous year.

The holiday season is expected to boost sales further

In a conference call with analysts, Apple CEO Tim Cook said that he expected the iPhone 17 line-up to keep doing well, and he predicted sales to increase in the final three months of the year.

The Cupertino, California, company forecasts its iPhone sales to increase at least 10% from last year's holiday season, according to projections provided by Apple's chief financial officer, Kevan Parekh. Total revenue is expected to rise at a similar rate.

"Looking ahead, Apple’s Q1 guidance of 10–12% revenue growth looks robust heading into the all-important Christmas period, underpinned by demand for the iPhone 17," said Barringer.

Are Apple shares attractive enough?

Apple's stock has been on a tear since a report earlier this month from the research firm International Data Corp. signalled the quarterly results with a preliminary analysis that concluded the company had set a new July-September record for iPhone sales. The rally catapulted Apple's market value above $4 trillion for the first time earlier this week, and now the stage is set for the shares to hit another new high during Friday's regular trading session.

But Apple has been widely seen as a laggard in the AI craze, one of the reasons that Nvidia — a chipmaker whose processors power the technology — became the first company to be valued at $5 trillion earlier this week.

Apple had promised a wide array of AI features would be rolling out on last year's iPhone models, but was only able to deliver a few of them. The missing upgrades included a smarter and more versatile version of its frequently flummoxed Siri virtual assistant – a makeover that Apple now doesn't expect to complete until next year.

Barringer raised doubts that Apple's current potential is enough to keep attracting investors. "With China uncertainty lingering and other tech giants like Microsoft and Nvidia offering faster growth stories, some investors may choose to look elsewhere in the short term," he added.

But Apple has a long history of late starts when technology starts to head in another direction before it finally catches up and emerges as a front-runner.

If Apple can pull it off again by eventually integrating more AI features on the iPhone, Wedbush Securities analyst Dan Ives believes those breakthroughs could boost the company's market share by another $1 trillion (€860bn) to $1.5tr (€1.3tr), translating into $75 to $100 per share.