Apple is heading into its most important sales quarter with strong iPhone momentum but rising component costs and limited availability of its new foldable model. CEO John Ternus told analysts that memory chip costs were climbing at an unprecedented rate and continued to rise. Apple is seeking savings on other components to offset some of the increase, though the value of its production orders rose by $33 billion over three months.
The company forecast a gross margin of 45% to 46% for the holiday quarter, below analysts’ expectations and down from more than 50% in the spring. Apple nevertheless expects revenue to increase by 7% to 10%, a stronger outlook than analysts had anticipated. It did not provide a specific iPhone sales forecast for the period.
In the latest quarter, iPhone revenue rose 17.5% year over year to $57.56 billion, beating analyst expectations by about $1 billion. The iPhone is Apple’s most important product, but the latest launch includes only two new, higher-priced ranges: the iPhone 18 Pro and the iPhone Duo. Less expensive new devices are expected next year, according to media reports.
Supply of the iPhone Duo, Apple’s first foldable smartphone, remains constrained. Delivery estimates for the device, which costs more than €2,000, had moved to January soon after sales began in October. Chief operating officer Sabih Khan said it was difficult to predict how quickly supply and demand would come into balance.
Ternus took over as CEO from longtime leader Tim Cook during the quarter and used his first analyst conference in the role to outline his vision for Apple. He said the company sees the iPhone as a central point of access to artificial intelligence applications, alongside its other devices.
Apple’s total quarterly revenue increased 12% year over year to $114.5 billion, while net income rose 12% to $30.7 billion. Repayments of US import tariffs also contributed to the result. Revenue from services and the China region grew but fell short of higher analyst expectations. Apple’s shares briefly declined about 3% in after-hours US trading.
Sources: Handelsblatt.