Apple says the iPhone 16 is selling well and Apple Intelligence is a big reason why

Apple Intelligence logo on iPhone
(Image credit: Shutterstock)

Given the push to launch and expand Apple Intelligence last year, you'd be right to conclude that's Apple thinks its suite of artificial intelligence-powered tools will play a major role in the company's growth. And we got a glimpse of just how major that is, particularly for Apple's iPhone business when the company announced its fiscal first quarter earnings yesterday (January 30).

While Apple reported all-time record sales of $124.3 billion for the three months ended December 29, iPhone revenue growth was essentially flat for the holiday quarter. The iPhone business accounted for $69.1 billion of Apple's sales for the quarter, down slightly from the $69.7 billion the company tallied during the same period a year ago.

Normally, that should set off alarm bells, as the December quarter not only covers the holiday shopping season, but it's also the first full quarter of sales after Apple's traditional fall iPhone launch. A drop in revenue would, on the surface at least, suggest a not-so-great start for the iPhone 16.

However, Apple insists that's not the case. In remarks to analysts after the earnings call, CEO Tim Cook brought up two things about iPhone sales that weren't immediately visible in Apple's balance sheet. For starters, Cook says, the iPhone 16 is actually selling better than the iPhone 15 did over the comparable launch date-through-the-end-of-the-calendar-year period. For another thing, Apple Intelligence appears to be convincing people to get new iPhones.

"Markets where we had rolled out Apple Intelligence .... performed better on a year-over-year basis than markets where we had not."

— Tim Cook

"Markets where we had rolled out Apple Intelligence during the [quarter] performed better on a year-over-year basis than markets where we had not," Cook told analysts. "It’s a positive indicator that we were pleased with."

That might explain a lot about Apple's iPhone numbers. Apple Intelligence launched in October, but only in U.S. English. That meant people in other parts of the world who wanted to use the new features had to change the region setting on their iPhone. By December, Apple introduced localized English versions of Apple Intelligence in the U.K., Australia, Canada, New Zealand and South Africa, so Apple Intelligence was only fully available in those countries for a few weeks during the quarter.

Apple Intelligence expanding

Apple Intelligence will be expanding to more areas soon enough. In April, Apple plans to add more languages to Apple Intelligence — specifically French, German, Italian, Japanese, Korean, Portuguese, Spanish and Vietnamese. Localized English versions are also coming to India and Singapore at that time, along with a Chinese English version.

Apple Intelligence's impact on iPhone 16 sales is certainly a surprise, at least to me. Right after iOS 18.1's release, I put together an assessment of Apple Intelligence, finding some features that I liked, others that I had little use for and mostly things that seemed like works in progress. There was promise to what Apple had come out with, I concluded, but nothing you'd go out of your way to upgrade for.

Based on Apple's data, it seems my analysis was slightly off.

"Apple Intelligence opens up an exciting new frontier and is already elevating experiences across iPhone, iPad, and Mac," Cook said.

Asked by analysts which features people are using the most, Cook specifically cited Writing Tools, Image Playground, Genmoji, Visual Intelligence and the Clean Up tool for editing photos.

"I know from my own personal experience using the features, you can’t imagine not using them anymore," Cook added. "I know I get hundreds of emails a day and the summarization function is so important. So I think it’s a combination of that and of course in April we roll out a whole series of new languages that we had mentioned and so the base grows further."

More hardware to come

iPhone SE 4 renders

iPhone SE 4 render (Image credit: Majin Bu)

It's not just about adding support for additional languages, though. Apple Intelligence's growth hinges upon Apple releasing more devices that can support those features. Right now, the AI tools are limited to the new iPhone lineup, as well as the iPhone 15 Pro and iPhone 15 Pro Max, which feature an AI-compatible A17 Pro chipset.

Apple never comments on unannounced products during its earnings briefings, and the company stuck to that script in this quarter's call with analysts. But certainly more Apple Intelligence-ready devices are in the works — and we could be seeing one sooner rather than later.

It's widely expected that Apple will release a new version of its midrange iPhone SE phone sometime during the spring. And if Apple sticks to its normal pattern of SE releases, the new phone will feature the same silicon Apple introduced the previous fall. That would mean an A18 system-on-chip, which would allow the iPhone SE 4 to run the same Apple Intelligence features currently available to iPhone 16 models.

If so — and if the new SE keeps its price under $500 — that could expand Apple Intelligence to a wider audience. And that's before the likely fall launch of the iPhone 17 lineup brings more Apple Intelligence-ready devices to the market.

Indeed, Apple Intelligence will be crucial to any success Apple enjoys this year, according to a research note from Francisco Jeronimo, a vice president for data and analytics at IDC EMEA.

"Apple Intelligence already played a significant role in this quarter’s results and is expected to remain a key driver moving forward," Jeronimo wrote. "Expanding its availability to Europe (and reaching an agreement with the EU) and to additional Asian markets and languages should be Apple’s primary focus in the year ahead."

More from Tom's Guide

Category
Arrow
Arrow
Back to Mobile Cell Phones
Storage Size
Arrow
Colour
Arrow
Condition
Arrow
Price
Arrow
Any Price
Showing 10 of 159 deals
Filters
Arrow
(256GB White)
Our Review
1
Apple iPhone 16 Pro Max White...
Mint Mobile
(128GB Pink)
Our Review
2
Apple iPhone 16 - 128GB - Pink
AT&T Mobility
Our Review
3
Apple iPhone 16 Pro 1TB in...
Verizon
(128GB)
Our Review
4
Apple iPhone 16 Pro 128 GB...
Total Wireless
(256GB White)
Our Review
5
iPhone 16 Pro 256GB titanium...
Straight Talk
Our Review
6
Apple iPhone 16 Plus 128 GB...
Visible
Our Review
7
iPhone 15 128GB Pink
Apple
(128GB Black)
Our Review
8
Apple iPhone 16 Plus Black...
Mint Mobile
Our Review
9
Apple iPhone 15 128 GB in...
Verizon
Our Review
10
Apple iPhone 16 Pro Max 256GB...
Verizon
Show more
Philip Michaels

Philip Michaels is a Managing Editor at Tom's Guide. He's been covering personal technology since 1999 and was in the building when Steve Jobs showed off the iPhone for the first time. He's been evaluating smartphones since that first iPhone debuted in 2007, and he's been following phone carriers and smartphone plans since 2015. He has strong opinions about Apple, the Oakland Athletics, old movies and proper butchery techniques. Follow him at @PhilipMichaels.

Read more
Apple Intelligence logo on iPhone
iOS 18.3 proves Apple Intelligence is far from finished
Writing tools in Apple Intelligence on an iPhone 16e
Getting an iPhone 16e? These are the 7 Apple Intelligence features I'd try out first
iPhone 16 Pro Max shown in hand
What to expect from iPhones in 2025: iPhone 17 Air, iPhone SE 4 and more
The Action button settings in iOS 18.4 with a Visual Intelligence shortcut for the iPhone 15 Pro
iOS 18.4 adds a crucial Apple Intelligence feature to the iPhone 15 Pro — and it makes your phone more powerful
Unofficial renders of the iPhone SE 4
The iPhone SE 4 is going to be Apple's most exciting phone release this year — here's why
Apple Intelligence on an iPhone screen
Apple analysts sound alarm on Siri delay — here’s why
Latest in iPhones
WWDC logo on yellow background
Apple WWDC 2025 date set for June 9 — iOS 19, Apple Intelligence and more expected
iPhone 16 with Apple Intelligence logo for iOS 18.1
iOS 18.4: All the newest Apple Intelligence features coming to your iPhone
Apple maps logo on iPhone screen
I avoided Apple Maps for trip planning — but these iOS 18 features are changing my mind
New emojis with iOS 18.4 beta release.
iOS 18.4 beta brings 8 new emoji to your iPhone — here's all the new options
An image of an iPhone screen showing the Safari app icon in the center
I got tired of Safari revealing my web searches in iOS 18.4 — this setting fixes that
iPhone Flip Concept
Foldable iPhone delays — there’s a bigger problem going on at Apple
Latest in News
CAD renders of the Google Pixel 10
Pixel 10 could include a repurposed ‘Pixie’ assistant — but what actually happened?
Galaxy S25 Edge dummy unit from side angle
Samsung Galaxy S25 Edge design just shown off on video from every angle with seemingly accurate dummies
iOS 19 logo on an iPhone
iOS 19 redesign mockups emerge — but not everyone is convinced
Sony WF-C710N
Sony's latest budget ANC buds have arrived with a fancy new color
Bill Gates in 2019
Bill Gates just predicted the death of every job thanks to AI — except for these three
ChatGPT advanced Voice Mode
ChatGPT's Advanced Voice Mode just got a free upgrade — here's what's new