Sales of the iPhone hit an all-time high in the final three months of last year, boosted by the new range of iPhone 17s, tech firm Apple reported on Thursday.

Revenue rose by 16% compared to the same period last year to $144bn (£82.5bn) - the strongest growth since 2021 - thanks to a jump in sales in China, as well as Europe, the Americas, and Japan.

However, sales in other parts of the company were less positive.

Wearables and accessories, which include things like the Apple Watch and AirPods, fell by roughly 3%. Sales of Mac computers were down by just over 7%.

Apple chief executive Tim Cook said the iPhone's boost in sales meant the firm was in "supply chase mode."

"To meet a very high level of customer demand, we're currently constrained," Cook said on a call with financial analysts.

Demand for the iPhone 17 "exceeded our expectations, to say the least," he said, noting that sales in India set a quarterly record for the region.

Cook declined to give any detail on a recently announced partnership with Google, in which the latter company's Gemini artificial intelligence (AI) product will be the basis of future Apple AI models and updates to its Siri functionality.

"Where investors are really wondering about what Apple is going to do next is on AI because they have hung back more than some of the other big tech names," said Anna MacDonald, investment manager at investment firm Aubrey.

She told the BBC that Apple products, including the packaging, should represent a "pleasurable, perfect experience", and that the current "stumbling" responses of ChatGPt are very "un-Apple-like", which could explain the firm's caution in rolling out AI.

But the company's ability stay on top of the smartphone market is "perhaps more uncertain than ever", according to Jacob Bourne, an analyst with Emarketer.

"It has to make the most of its Google Gemini partnership to deliver Siri upgrades that make consumer voice AI relevant, seamless, and monetisible," Bourne said.

Apple and Google have a separate partnership for search, in which Google effectively provides the search engine capabilities for Apple Safari.

Hardware over AI

Apple plans to spend $16bn in the coming fiscal year on further build-out of its business, including retail stores and infrastructure.

Compared to a company like Microsoft, which spent more than $37bn in capital expenditures in its most recent quarter alone, largely on AI projects, Apple's spending is conservative.

Wall Street investors have expressed concerns with how much Microsoft is spending on AI with without a similar growth in revenue.

After reporting its quarterly results on Wednesday, Microsoft's stock fell by 10% during Thursday trading, its biggest single-day drop since 2020.