Apple Inc.\u2019s fiscal third quarter delivered a stunning array of all\u2011time records, but the celebration on Tim Cook\u2019s final earnings call as chief executive was tempered by warnings that surging memory costs and tightening semiconductor supply will weigh on the September period and potentially beyond.<\/p>\n
\u201cIt\u2019s not a regular supply issue. It\u2019s a demand forecast issue, to be candid,\u201d Cook told analysts. \u201cThe iPhone and the Mac are both doing remarkably better than we thought they would do \u2026 We\u2019ve got a quarter that we\u2019re going to be scrambling on the supply side, essentially.\u201d<\/p>\n
The results themselves were undeniably strong. Total revenue of $109.4 billion rose 16% from a year ago, exceeding the company\u2019s own expectations and setting a June quarter record. Diluted earnings per share jumped 29% to $2.02, including a $0.11 tailwind from tariff refunds, while gross margin reached 50.1% \u2013 a level that included an approximately two\u2011percentage\u2011point benefit from those same refunds.<\/p>\n
Product\u2011segment momentum<\/p>\n
ProductQ3 FY2026 RevenueYoY ChangeiPhone$54.3B+22% (record)Mac$10.4B+29% (record)iPad$6.2B\u20136%Wearables, Home & Accessories$7.9B+6%Services$30.7B+12% (record)<\/p>\n
Prior\u2011year comps based on FY2025 Q3: iPhone $44.58B, Mac $8.05B, iPad $6.58B, Wearables $7.40B, Services $27.42B. Source: SEC filings.<\/p>\n
iPhone\u2019s 22% surge came on the back of the iPhone 17 family, which CFO Kevan Parekh said drove double\u2011digit growth in the vast majority of markets and led the company to set June quarter records for upgraders. Customer satisfaction in the U.S. reached 99% according to 451 Research. Mac\u2019s 29% leap was powered by the all\u2011new MacBook Neo and MacBook Pro, with the Neo grabbing particular attention in education and enterprise; Parekh noted that about half of the large U.S. education purchases during the quarter displaced Windows and Chromebook devices. iPad, facing a tough comparison against last year\u2019s A16\u2011powered launch, slipped 6%, though its installed base hit an all\u2011time high. Services revenue crossed $30 billion for the first time in a June quarter, buoyed by all\u2011time records in cloud and payment services, while Apple\u2019s paid subscription base surpassed 1.5 billion.<\/p>\n
The memory \u201c100\u2011year flood\u201d and margin pressure<\/p>\n
Cook was unusually blunt about the cost environment. \u201cWe reluctantly raised prices,\u201d he said, \u201cbecause we\u2019re in what I would characterize as a 100\u2011year flood on the memory pricing, with exponential increases.\u201d<\/p>\n
Parekh provided the arithmetic behind the margin compression. Excluding the tariff\u2011refund boost, the June quarter gross margin came in at 48.1%, down 120 basis points sequentially from March\u2019s 49.3%. \u201cMore than 100% of that can be explained by the memory cost change,\u201d he said. The sequential decline from an adjusted 48.1% to the midpoint of the September guidance (46.5%, once the expected one\u2011point tariff benefit is removed) is similarly driven by memory. While carry\u2011in inventory and lower costs on non\u2011memory components provide partial offsets, Parekh cautioned that \u201cthe benefit of carry\u2011in inventory is expected to decrease over time.\u201d Beyond September, market pricing for memory continues to rise, and Cook added that Apple is \u201cevaluating all options\u201d on the sourcing side, noting that the DRAM market currently has only three suppliers.<\/p>\n
Supply constraints and the cautious September outlook<\/p>\n
The September quarter guidance \u2013 total company revenue growth of 9% to 11% year\u2011over\u2011year \u2013 represents a notable deceleration from the 16% just delivered. Two factors are at work. First, a sequential foreign\u2011exchange headwind of about 2.5 percentage points will reduce the headline growth rate. Second, supply constraints are expected to \u201cincrease significantly\u201d and will affect iPhone, Mac, and iPad. Cook stressed that the root cause is not a supplier failure but unexpectedly robust demand for its advanced\u2011node SoCs: \u201cWe\u2019ve been pulling supply ahead. At some point, there\u2019s a limit to that.\u201d<\/p>\n
Parekh indicated that iPhone revenue growth is expected to be in the mid\u2011teens range for September, while services growth, after removing a 2.5\u2011point sequential FX hit, will be \u201clargely similar\u201d to the 12% reported in the June quarter. The services business already bears a heavier FX burden than the total company; Parekh flagged that the cumulative FX drag on services from March to September will be about five percentage points.<\/p>\n
Tim Cook\u2019s farewell and leadership transition<\/p>\n
The call marked Cook\u2019s last as CEO; incoming chief executive John Ternus joined the line and fielded a question on the competitive landscape. \u201cThere is so much opportunity for us with everything that\u2019s happening in this space,\u201d Ternus said. \u201cWe\u2019re just really focused on our plans and very excited about it.\u201d Cook emphasized that the transition is seamless and expressed \u201cnever been more optimistic\u201d about Apple\u2019s future. The company also unveiled a new multi\u2011year agreement with Broadcom exceeding $30 billion for U.S.\u2011based silicon components, part of its broader $600 billion American investment commitment.<\/p>\n
What analysts pressed on<\/p>\n
The Q&A session surfaced the tension between stellar unit performance and looming headwinds. Ben Reitzes of Melius Research asked how deeply supply constraints would bite in the December quarter, to which Parekh replied that the company would not provide guidance beyond September. Cook reiterated that the constraints stem from advanced nodes and that the Arizona fab sourcing over 100 million components is performing well but isn\u2019t the issue.<\/p>\n
Erik Woodring of Morgan Stanley pressed on pricing philosophy, and Cook explained that Apple looks at \u201cunits, revenue, and margin\u201d over the long term, not a 90\u2011day mathematical formula. Amit Daryanani of Evercore wanted more color on memory sourcing flexibility, and Cook hinted at evaluating all options while pointing to the concentrated DRAM market. Samik Chatterjee raised the regulatory hurdles for launching Siri AI in China and Europe; Cook noted that the EU negotiations are ongoing for iPhone\/iPad, while the Mac is exempt, and that China has just approved the original Apple Intelligence features.<\/p>\n
As Cook signed off, he left investors with a message both nostalgic and forward\u2011looking: \u201cWe have a bright future ahead, and I truly have never been more optimistic.\u201d The rally in Apple\u2019s stock after hours suggested that Wall Street largely agreed, even if the path to the holiday quarter looks bumpier than the record numbers alone would imply.<\/p>\n","protected":false},"excerpt":{"rendered":"Apple Inc.\u2019s fiscal third quarter delivered a stunning array of all\u2011time records, but the celebration on Tim Cook\u2019s…\n","protected":false},"author":2,"featured_media":172483,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[23148],"tags":[19116,633,78097,17124,1039,8298,2344,31761,8402,54804,628],"class_list":["post-172482","post","type-post","status-publish","format-standard","has-post-thumbnail","category-john-ternus","tag-app-store","tag-apple","tag-apple-upgrade","tag-broadcom","tag-dram","tag-iphone-17","tag-john-ternus","tag-kevan-parekh","tag-macbook-neo","tag-siri-ai","tag-tim-cook"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@people\/117011648576811080","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/172482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/comments?post=172482"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/172482\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media\/172483"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media?parent=172482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/categories?post=172482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/tags?post=172482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}