In January, Apple finalized a multiyear agreement with Google to incorporate Google’s Gemini models and cloud infrastructure into its next-generation Siri platform. Under the terms, Apple will pay Google a guaranteed annual fee in the low-single-digit billions of dollars over the life of the contract, marking Apple’s largest external AI expenditure to date. The deal aims to accelerate delivery of personalized natural-language features on 2 billion active iPhones and iPads, and analytics firm Bank of America estimates the partnership could drive upgrade demand by up to 5 percentage points in the March quarter.

During its December quarter, Apple reported double-digit year-over-year growth in iPhone revenue, buoyed by strong adoption of the iPhone 17 series. Third-party data shows unit shipments rose approximately 12 percent versus the prior year, the fastest holiday-quarter increase since 2021. Management reaffirmed guidance for 10 to 12 percent revenue growth in the March quarter, with iPhone sales expected to contribute roughly half of total revenue, a notable rebound from the mid-single-digit growth achieved in the prior comparable period.

Apple signaled only a modest rise in capital expenditures for fiscal 2026, targeting approximately $25 billion—up from $23 billion in fiscal 2025—as it prioritizes device launches over large-scale data-center builds. Supply-chain contracts negotiated last year should limit gross-margin impact from higher memory costs to no more than 50 basis points in the March quarter. Analysts at Visible Alpha project operating margins of 28 percent, near the company’s three-year average, as product mix shifts toward higher-margin wearables and services.