Apple posts record year as iPhone hits $57.6 billion

Apple's results land at a moment when its Big Tech peers are spending heavily on AI infrastructure, yet Apple is taking a different route. Its approach combines on-device processing, its own servers, and outside AI technology — Siri AI uses models developed with Google's Gemini technology, and Apple reportedly plans to let users choose among outside AI providers for features like writing tools and image generation. That mix lets Apple sell devices that run AI locally, such as the Mac Mini and Mac Studio, which Gap is using for loss prevention across hundreds of stores and Christie's is using for pricing estimates, according to the company.

The earnings call reflected how central AI has become to Apple's story: AI and Apple Intelligence were mentioned a record 45 times, according to AlphaSense, more than on the call after the technology and a revamped Siri were unveiled in June 2024. New CEO John Ternus, on his first earnings call in the role, said Apple sees "tremendous opportunity in AI." Siri AI is only beginning to reach customers — it launched in beta for US English users in September and expanded to French, Japanese, Korean, Portuguese, and Spanish in October.

Apple also profits when customers subscribe to someone else's AI. The Wall Street Journal reported Apple was on pace to bring in more than $1 billion in App Store fees from generative AI apps in 2026, according to AppMagic — though OpenAI has begun directing subscribers to pay through its website instead of the App Store, bypassing Apple's commissions. Apple's CFO said it is too early to predict how many Siri AI requests will require servers rather than on-device processing, which will shape the cloud costs that appear in services cost of sales. For now, Apple is positioned to collect from AI whether the models are its own or a competitor's.