Apple doubles down on AI partners amid iPhone 17 supply squeeze and higher tariffs

Apple capped a strong quarter with $102.5 billion in revenue, and CEO Tim Cook used the moment to sketch where the company is heading next: deeper into artificial intelligence, while navigating supply bottlenecks and higher trade costs. The headline message was clear – Apple will broaden AI collaborations, even as it works to put more iPhones in people’s hands during the busy shopping season.

Record quarter, cautious logistics

Despite robust demand, Apple is contending with supply constraints affecting multiple models, including the new iPhone 17 family and last year’s 16-series devices. That tension – strong orders versus limited inventory – often shows up as longer delivery windows and uneven in-store availability. For buyers, it may mean specific colors or storage tiers selling out faster; for Apple, it’s a balancing act between ramping production and protecting margins.

Holiday outlook: growth still on the table

Apple expects December-quarter revenue to rise 10%–12%. If execution holds, that implies healthy seasonal momentum, even with constrained iPhone supply. Practical read-through: Apple’s mix could tilt toward higher-end SKUs where available, supporting average selling prices, while services continue to provide steadier, margin-rich growth.

Siri’s AI reboot – long promised, still coming

Cook reiterated plans to ship the long-awaited, AI-overhauled Siri next year. The upgrade – delayed from an earlier window – aims to make Siri more context-aware and useful across apps and devices. The latest chatter points to a potential March 2026 launch, though Apple is not committing to that date publicly. Regardless of exact timing, the direction is unmistakable: a more capable assistant integrated deeply across the ecosystem.

Apple Intelligence: more partners after OpenAI

Following the 2024 OpenAI deal, Cook said Apple intends to add more AI providers to its Apple Intelligence suite. He didn’t name names, but the strategy signals optionality for users and developers and a multi-model future where Apple can match different tasks to specialized models – while maintaining Apple’s familiar emphasis on privacy and on-device processing where feasible.

Tariffs: the cost of doing (global) business

Trade policy remained a headwind. Apple incurred $1.1 billion in tariffs in the September quarter and anticipates $1.4 billion in the December quarter. Those costs may pressure margins and, depending on competitive dynamics, could influence pricing or promotions in certain regions.

The bottom line

Apple is leaning into AI partnerships, prepping a major Siri overhaul, and aiming for double-digit holiday growth – all while wrestling with component supply and rising tariffs. For customers, expect sporadic iPhone availability yet continued software advances. For investors, the near-term story hinges on supply cadence and services resilience; the medium-term hinges on how effectively Apple operationalizes a multi-partner AI strategy inside Apple Intelligence.