CUPERTINO, November 3, 2026 — Apple’s fiscal fourth-quarter revenue rose 12% to $114.48 billion, beating Wall Street estimates as demand for its latest iPhone models helped deliver a strong start for new chief executive John Ternus. The more difficult signal came in the company’s outlook: higher memory-chip costs are expected to narrow margins in the holiday quarter, while services growth is forecast to slow below analysts’ expectations.
Apple reported net income of $30.71 billion, or $2.10 per share, for the July-to-September period, compared with $27.47 billion and $1.85 per share a year earlier. Revenue exceeded the $113.39 billion average estimate cited by Reuters, and iPhone sales reached $57.58 billion, also above forecasts. The results were helped by demand for the iPhone 18 Pro lineup and price increases across some products.
Investors initially reacted calmly to the earnings beat, but the share price weakened during the conference call as executives outlined the next quarter’s margin and services outlook. The distinction matters: Apple’s latest quarter was strong, yet the company is entering its busiest selling period with rising component costs, a changing product calendar and a new foldable phone whose demand is running ahead of supply.
The iPhone remained the main driver of Apple’s quarterly performance. Sales of $57.58 billion topped the $56.54 billion estimate cited by Reuters, while the Associated Press described iPhone revenue as a record. The company’s newer Pro models benefited from demand and higher prices, helping lift the overall revenue line despite uneven results in other product categories.
Apple’s Mac business also performed better than analysts expected. Revenue reached $10.79 billion, above the $9.61 billion estimate reported by Reuters. The company’s computers have attracted interest from developers and technical users who want to run AI-related software locally, although the quarter’s results do not establish how much of Mac demand was directly caused by artificial intelligence.
Services revenue was $31.57 billion, close to the $31.58 billion estimate. That is a large and recurring part of Apple’s business, spanning areas such as subscriptions, digital services and other customer relationships that continue after a device is sold. The concern is not that services suddenly contracted in the quarter; it is that the growth rate expected for the December period is weaker than analysts had anticipated.
Apple forecast services revenue growth of 8% to 9% for the holiday quarter, below the 10.7% growth expected by analysts, according to Reuters. That gap helped explain why the market’s reaction changed during the earnings call. Services are watched closely because they can support the company’s margins when hardware demand fluctuates. Slower growth does not necessarily mean the business is shrinking, but it can affect how investors value the quality and durability of future earnings.
Sales of iPads and wearables were below the estimates cited by Reuters, illustrating that strength in the iPhone and Mac lines did not translate into a uniform improvement across the portfolio. Apple does not depend on every category growing at the same rate, but a broad product range gives the company more ways to keep customers inside its ecosystem. When some categories lag, investors look for evidence that the stronger businesses can offset the weakness without requiring deeper discounting or costly promotions.
The quarter also included a five-cent-per-share benefit from tariff refunds, according to the Associated Press. Apple’s $2.10 per-share result was still above the $1.99 estimate cited by Reuters even when that benefit was excluded. The detail is important because one-off items can distort comparisons between quarters; the underlying operating trend is better judged by considering both the reported result and the factors that temporarily lifted it.
Apple expects gross margin of 45% to 46% in the quarter ending in December, down from 47.9% in the September quarter. Reuters reported that the company attributed the pressure partly to rising memory-chip costs. The change would leave Apple with less gross profit from each dollar of sales unless it offsets the expense through pricing, product mix, supplier terms or efficiencies elsewhere in the business.
The memory market is being reshaped by demand for AI infrastructure. Data centres require large quantities of memory alongside processors, storage and networking equipment, and suppliers have been directing capacity toward products used in higher-end computing systems. Consumer-device makers then compete for components that are also needed by cloud providers and AI developers. That does not mean every phone or laptop is affected equally, but it increases the chance that manufacturers will face higher costs or less predictable availability.
Apple has some protection because it negotiates supply arrangements at scale and holds inventory that can cushion short-term price movements. Ternus told Reuters that higher memory costs compared with the June quarter were partly offset by inventory carried earlier and lower costs for certain non-memory components. The company has also raised prices on some products, helping absorb part of the component increase. Those measures can soften the effect, but they cannot guarantee that margins will hold if memory prices continue rising.
Price increases carry their own trade-offs. Higher prices can protect margins when demand is strong, but they may make consumers delay an upgrade or choose a less expensive model if budgets are tight. Apple’s customer base has historically shown willingness to pay for premium devices, yet that willingness is not unlimited. The company must balance the need to recover higher component costs with the risk of making a device less attractive relative to competing phones and computers.
Artificial intelligence is both part of the demand story and a source of uncertainty. Apple’s newer AI features, including its redesigned Siri experience, require computing resources and engineering work. Ternus said Siri was handling about 2.5 billion requests a day, according to Reuters, but Apple has not publicly broken out the cost of those requests or the revenue directly attributable to them. The number demonstrates scale of use; it is not by itself a measure of profitability.
Apple’s approach differs from rivals that have announced very large investments in their own data-centre infrastructure. The company has used partnerships to support parts of its AI strategy, which can limit the need to fund every layer of the infrastructure itself. That approach may help preserve capital flexibility, but it also creates dependence on external providers and leaves questions about how Apple will control performance, privacy, cost and product differentiation over time.
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Apple’s first foldable phone, the iPhone Duo, was not on sale during the fiscal fourth quarter and therefore did not contribute to the reported results. The device went on sale in October with a starting price of $1,999. The Associated Press reported strong demand and supply constraints, with the earliest shipping dates moving into January. That creates a different challenge from the mature iPhone business: Apple needs to expand production while ensuring a new form factor meets the reliability standards customers expect.
Some users have reported cracked screens on the foldable device. Ternus told Reuters that a “very small percentage” of units had been returned for display issues and that Apple was replacing them. He also said the company could not yet predict when supply and demand would be in balance. Those comments describe Apple’s account of the problem; they do not establish a final failure rate across all devices or show that every complaint has the same cause.
Foldable phones place different demands on display materials, hinges and internal components than conventional handsets. A flexible display must tolerate repeated opening and closing while preserving image quality and touch response. A report of a cracked screen does not, on its own, prove a design-wide defect, but a pattern of complaints can become a reputational issue if customers cannot obtain timely repairs or replacements. Apple’s response will be judged by the frequency of failures, the speed of service and whether later production runs show improvement.
Supply constraints can also limit the financial contribution of a product that attracts strong interest. A high-priced device may lift revenue per unit, but the benefit is capped if manufacturing output cannot meet demand. New products can take time to scale because suppliers need to refine processes, improve yields and deliver components consistently. The company must decide how quickly to expand production without allowing quality problems to undermine the launch.
The product calendar is changing under Ternus, who took over as chief executive in September. Apple has spread some launches across the year rather than relying on a single autumn wave of new iPhones. That can help smooth seasonal revenue and keep customers engaged, but it also complicates comparisons between quarters. Investors will need to distinguish demand changes from the timing of product launches and the availability of new devices.
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The December quarter is usually the most important selling period for Apple because it includes major holiday shopping weeks in several markets. The company’s forecast puts the focus on whether higher sales can offset lower gross margins. Revenue growth alone will not answer that question: investors will also watch the mix of premium and lower-priced devices, services growth, component costs and the rate at which the iPhone Duo becomes available.
China remains an important market because it combines a large consumer base with intense competition among premium smartphone makers. The Associated Press reported strong growth in China alongside record iPhone revenue, although the results do not remove longer-term uncertainty around local competition, consumer demand or the timing of upgrades. Apple’s performance in the market will depend on product appeal, pricing and the strength of its ecosystem as much as on one quarter’s sales.
Mac demand is another variable to monitor. If more developers and businesses use Macs to run AI agents or other demanding workloads, that could support the computer line. But the company has not provided evidence that AI workloads alone explain the recent increase. Mac sales can also respond to replacement cycles, product updates and the needs of customers who prefer the company’s hardware and software integration.
For services, the key issue is whether growth stabilises near the new forecast or weakens further. Services can produce recurring revenue, but the category is exposed to changes in consumer spending, subscription behaviour, regulatory decisions and competition. The latest guidance is a forecast rather than a guarantee; Apple will need to show how actual results compare as the quarter progresses.
Investors will also look for clearer evidence about the cost of AI features. A widely used assistant can improve the appeal of a device, but its economics depend on how much computing it consumes, whether processing happens on-device or in the cloud, and whether the feature helps sell hardware or services. Apple has not disclosed a separate profit-and-loss statement for its AI products, so it is too early to determine their direct effect on margins from the figures available.
Apple’s latest quarter shows that demand for its core products remains strong enough to beat estimates, while the outlook highlights the pressure building underneath that growth. The company enters the holiday period with a record iPhone performance, a new foldable product and a broader AI strategy, but it must manage higher memory costs and weaker expected services growth. The next report will show whether pricing, product mix and supply-chain execution can keep earnings expanding as the cost of delivering new features rises.
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