Tim Cook Explains Why iPhone 16 Sales Soared in Countries Supporting Apple Intelligence, While China’s Revenue Declined This Quarter

During Apple’s Q1 2025 earnings call, CEO Tim Cook expressed noteworthy satisfaction as the company announced a record revenue of $124.3 billion, coupled with impressive double-digit profit growth. However, he underscored that this remarkable figure could have been even greater with a wider implementation of Apple Intelligence. Currently, some regions still do not support the service, indicating a vital area for future growth. Cook highlighted that countries embracing the new generative AI features experienced a notable boost in iPhone 16 sales, thus stressing the need for expansion into additional markets.

Impact of Unsatisfactory Apple Intelligence Rollout on China Revenue

Significantly, Apple’s revenue in China fell to $18.513 billion, marking an 11% decline compared to Q1 2024. This decrease can be attributed in part to the absence of local partnerships necessary for Apple Intelligence to thrive in this key market. According to insights shared with AppleInsider, Tim Cook suggested that the generative AI capabilities could have greatly influenced iPhone 16 sales, which generated $69.1 billion during this quarter. Although this figure constitutes a majority of Apple’s overall revenue, it reflects a slight downturn from the $69.7 billion reported in Q1 2024.

Despite the impressive sales figures, it’s important to note the challenges Apple faces in China due to the lack of Apple Intelligence availability. The company is still actively seeking partnerships with major Chinese enterprises like Tencent or ByteDance to expedite the launch locally. With a substantial drop in revenue from $20.8 billion in Q1 2024, the significance of China as the largest smartphone market cannot be overstated. Analysts suggest that once Apple Intelligence is available globally, customers could be inclined to purchase higher storage variants of devices, as utilizing the new AI features necessitates 7GB of unallocated space.

These specifications underscore Apple’s commitment to user privacy, as the company aims to run AI models locally. This decision may actually enhance revenue as consumers eager to leverage Apple Intelligence might opt for models with at least 256GB of storage, thus elevating the average selling price of compatible devices. However, with the gradual rollout of Apple Intelligence, the complete impact on sales and revenue will likely take several months to materialize.

If you believe that the introduction of Apple Intelligence will drive increased sales for the iPhone 16, we welcome your thoughts in the comments below.

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