iPhone demand soared 22% taking home $54 billion, just about half of total revenue over the previous three months.
📱 iPhones deliver a heavyweight quarter
- Apple shares tumbled more than 8% after the earnings call, despite a solid fiscal third quarter. Slower growth, tighter supplies and pressure on profit margins spoiled the beat.
- Revenue climbed 16% year over year to $109.4 billion, beating analysts’ $108 billion estimate. Adjusted earnings reached $2.02 per share, comfortably ahead of the $1.89 expected. On the rear-view mirror test, Apple passed with room to spare.
- iPhone sales surged nearly 22% to $54.3 billion, topping Wall Street’s $53.1 billion forecast and accounting for roughly half of company revenue.
- Demand is clearly alive and scrolling. Building enough devices without sacrificing profitability is now the trickier part.
👀 Guidance spoils the earnings party
- Apple expects September-quarter revenue to grow between 9% and 11%. The midpoint implies roughly $113 billion, short of Wall Street’s $114.9 billion estimate and 12% growth forecast.
- For most companies, double-digit-ish growth is excellent. Apple is graded on a more expensive curve.
- Management blamed two familiar corporate headaches: unfavorable currency movements and worsening supply constraints.
- Foreign exchange alone is expected to shave around 2.5 percentage points from annual revenue growth, while component shortages could restrict production across the iPhone, Mac and iPad.
- Higher memory-chip costs are also squeezing margins, meaning Apple may keep less profit from every dollar of sales.
- The AI infrastructure boom is swallowing components at industrial scale, leaving the world’s biggest hardware company competing with data centers for increasingly pricey silicon.
🧠AI boom bites into device prices
- The industry-wide memory shortage already prompted Apple to raise some MacBook and iPad prices by .
- Thursday’s update offered little clarity on how long the drought might last, which is rarely the uncertainty investors enjoy paying premium valuations to inherit.
- Apple recently reclaimed its crown as the and briefly touched a $5 trillion valuation.
- Its relatively restrained AI spending made it a haven from Big Tech’s capex binge. Now that same AI boom is squeezing Apple through its suppliers.
- The warning arrives as Tim Cook prepares to step down as chief executive, leaving with strong demand, record-scale revenue and a supply-chain puzzle.