CUPERTINO, California: Apple reported better-than-expected quarterly earnings on May 1, driven by strong iPhone sales, as investors also turned their focus to an upcoming leadership transition and the company's artificial intelligence plans.

The tech giant posted net income of US$29.58 billion, or $2.01 per share, for the January–March period, up about 22 percent from a year earlier. Revenue rose roughly 17 percent to $111.18 billion, with iPhone sales contributing $56.99 billion.

The results beat analyst expectations. Analysts surveyed by FactSet Research had forecast earnings of $1.95 per share on revenue of $109.46 billion.

CEO Tim Cook said it was the company's best March quarter ever, with "double-digit growth across every geographic segment". Strong demand for the iPhone 17 lineup helped drive the performance.

Earlier this month, Cook announced he would step down as CEO later this year, with Apple's head of hardware engineering, John Ternus, set to take over on September 1. Cook will remain as executive chairman.

Apple also introduced new products in March, including the iPhone 17e and the MacBook Neo, marking a push into more affordable devices. Demand has been strong, but supply constraints have emerged due to the limited availability of advanced components used in device processing.

Cook said these constraints would continue into the current quarter, affecting several Mac models. He noted that demand for the Mac Neo has been "off the charts."

The company also flagged rising costs. Memory expenses increased in the latest quarter and are expected to rise further. Cook told analysts that "we believe memory costs will drive an increasing impact on our business."

"Apple showed that even the best operators can't fully escape the memory squeeze," said Jake Behan, Direxion's head of capital markets. "Tim Cook's warning of ‘significantly higher' costs in the coming quarters tells you how real the AI-driven supply crunch has become for the entire industry."

On artificial intelligence, Cook said Apple would introduce "a more personalized Siri" this year, without giving a timeline. He also pointed to upcoming software and developer tools, adding that Apple's systems deliver "intelligence that is fast, personal, and private."

"This is not AI as a standalone feature, but AI is an essential, intuitive part of the experience across our devices," Cook said.

Cook, who has led Apple for 15 years after succeeding Steve Jobs, oversaw a period in which the company's market value grew by more than $3.6 trillion.

Ternus briefly joined the earnings call, with Cook emphasizing a smooth transition. "This is the most exciting time in my 25-year career at Apple to be building products and services," Ternus said. "There are so many opportunities before us, and I couldn't be more optimistic about what's to come."