CUPERTINO, California: Apple is expected to post its strongest June-quarter sales growth in five years when it reports earnings this week, with steady iPhone prices helping the company gain market share even as rivals grappled with higher component costs and weaker smartphone demand.

The technology giant raised prices for iPads and MacBooks last month to offset higher costs stemming from shortages of memory and storage chips driven by the rapid expansion of AI data centers. However, it left iPhone prices unchanged, even as competing smartphone makers passed on higher costs to consumers.

The strategy appears to have paid off. According to research firm Counterpoint, iPhone shipments rose three percent during the April-June quarter, lifting Apple's global smartphone market share to nearly one-fifth despite worldwide smartphone shipments falling to their lowest level in 13 years.

Apple has also benefited from avoiding the massive AI infrastructure spending undertaken by many of its technology rivals. The company's shares have climbed nearly 25 percent this year, allowing it to reclaim the title of the world's most valuable company from Nvidia. Its market value briefly topped $5 trillion on July 28.

"Apple was initially scorned by many investors for not joining the AI investment cycle. Now, it is actually being rewarded as investors question the relationship between (Big Tech's) spending and return on investment," said Dan Morgan, portfolio manager at Synovus Trust, which owns Apple shares.

Morgan said he expects Apple to increase prices later this year, a move that could weigh on demand and pressure a company whose valuation leaves "a lot of room for error."

Analysts widely expect Apple to raise iPhone prices when it unveils its next generation of devices, typically in September. Earlier this month, the company also increased prices for Apple Music and its Apple One subscription bundle.

According to LSEG data, Apple is expected to report revenue of $108.65 billion for the April-June period, up 15.5 percent from a year earlier and marking its strongest fiscal third-quarter sales growth since 2021.

Profit is projected to increase 18.1 percent, although gross margin is expected to ease to 47.9 percent from 49.3 percent in the previous quarter.

Analysts believe Apple's loyal customer base and tightly integrated product ecosystem should help cushion the impact of future price increases.

"Apple's core product demand has been somewhat inelastic, with iPhone being the most inelastic product within Apple's product ecosystem, followed by Mac and then iPad," Morgan Stanley analysts said.

"This generally means that recent price increases are unlikely to materially disrupt demand, especially considering supply challenges at peers."

LSEG estimates iPhone revenue rose 20.8 percent during the quarter, also the strongest third-quarter growth since 2021. Mac revenue is expected to grow 8.7 percent, up from 5.7 percent in the previous quarter, while iPad sales growth is projected to slow slightly to 5.2 percent from eight percent.