---
title: "AAPL: AI Gap, Storage Price Hikes — Still Steady?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/40345328.md"
description: "Apple (AAPL), Beijing time morning of May 1, 2026, released FY26 Q2 results after the US close (quarter ended Mar 2026). Key takeaways: 1) Headline results:This quarter, $Apple(AAPL.US) posted revenue of $111.2bn (+16.6% YoY), beating market est. ($109.7bn). Growth on the top line was driven by iPhone and Services.GPM was 49.3% (+220bps YoY), above market est. (48.5%)..."
datetime: "2026-05-01T02:07:24.000Z"
locales:
  - [en](https://longbridge.com/en/topics/40345328.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/40345328.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/40345328.md)
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# AAPL: AI Gap, Storage Price Hikes — Still Steady?

AAPL reported FY26 Q2 (quarter ended Mar 2026) after the US close on May 1 (Beijing time). Key takeaways below.

**1) Headline results:** $Apple(AAPL.US) posted revenue of $111.2bn (+16.6% YoY), beating consensus ($109.7bn). Growth was driven by iPhone and Services.

**Gross margin (GPM) was 49.3%, up 220bps YoY,** above consensus (48.5%). **Services GPM rose to 76.7%,** while **Hardware GPM was 38.7%** (+280bps YoY). **Hardware GPM expansion reflected higher iPhone 17 volumes and USD weakness vs. CNY, among other factors.**

**2) iPhone:** revenue of $57.0bn (+21.7% YoY), in line with consensus ($57.0bn). Growth was fueled by strong iPhone 17 demand in China and USD/CNY tailwinds. **We estimate iPhone shipments rose ~5.5% YoY, with ASP up ~15.3% YoY.**

**3) Hardware ex-iPhone:** all categories grew to varying degrees. **iPad revenue rose 8% YoY,** helped by M5 Pro and A16 models. **Apple launched MacBook Neo at a $599 entry price, broadening the addressable base and returning Mac to growth this quarter.**

**4) Services:** revenue reached $31.0bn (+16% YoY), beating consensus ($30.4bn). With a 76.7% GPM, **Services generated 43% of company GP on 28% of revenue.**

**5) Revenue by region:** the Americas remained the core, sustaining a 40%+ mix with 12% YoY growth. **Greater China was the best performing region,** aided by state subsidies on iPhone 17 256GB, **lifting Mainland China iPhone shipments by 33% YoY (IDC).**

**Dolphin Research View: iPhone 17 is on fire. Watch whether the new Siri can close the AI gap.**

Apple delivered a solid quarter, with both revenue and GPM above expectations. **The outperformance was driven by iPhone 17 and USD weakness vs. CNY.**

**1) Top-line growth:** primarily from iPhone 17 sell-through. **iPhone rose 22% YoY, with China iPhone shipments up 33% YoY.** Despite limited innovation, iPhone 17 achieved notable success in China, where the 256GB model benefited from state subsidies and took share from Android brands.

**2) Margin expansion:** despite memory price headwinds, **Hardware GPM rose YoY on iPhone scale, USD/CNY tailwinds, and lower tariff costs.** With a focus on mid-to-high-end devices, Apple is less exposed to memory inflation and can better absorb the cost pressure vs. peers.

**Beyond this quarter, management guided next-quarter revenue +14–17% YoY ($107.1–110.0bn),** and GPM of 47.5–48.5%. iPhone remains the primary growth driver next quarter. Despite sharp memory cost inflation, the margin guide underscores strong supply-chain execution.

Outside the print, the market is focused on several items.

**a) CEO transition:** Apple announced leadership changes: Tim Cook will step down as CEO on Sep 1 to become Executive Chairman, with John Ternus, SVP of Hardware Engineering, becoming CEO.

The new CEO’s hardware pedigree aligns with next-gen smartphone and AI device competition. Cook remaining as Executive Chairman helps ensure policy continuity and a smooth strategy transition.

**The market broadly views the transition as long-planned, with no major strategic shift expected.** Apple will continue to balance hardware and Services, leveraging vertical integration and supply-chain strengths to sustain growth. Watch management’s commentary in upcoming investor communications.

**b) China recovery:** the rebound this quarter was led by stronger iPhone sales in China. **By contrast, iPhone shipments outside China were roughly flat YoY.**

iPhone 17 performed well in China in part because memory inflation weighs less on iPhone economics. **Additionally, state subsidies on iPhone 17 256GB intensified competitive pressure on Android brands.** **iPhone share in China reached 19% this quarter, up 530bps YoY.**

**c) Memory inflation mitigation:** 1) sign LTAs for memory to lock in cost, using scale to secure favorable pricing and pre-build inventory buffers. **2) Advance in-house baseband while reducing costs in non-memory components.** **3) Optimize product mix and consider selective price actions** to lift blended ASP. The next-quarter GPM guide suggests Apple can mitigate memory inflation via supply-chain control.

**Apple’s current mkt cap is $3.98tn, implying ~31x PE on FY26 net income** (assuming revenue +14%, GPM 48.4%, tax rate 17.5%). Versus the historical 25x–40x range, the stock sits slightly below the midpoint.

Near-term results are strong on iPhone 17 momentum. **On memory inflation, Apple can dilute or absorb cost pressure through LTAs, supply-chain management, and mix optimization.**

That said, recent strength does not dispel concerns about sustained high growth, keeping valuation within the historical band. **With AI and LLMs advancing, the market is looking for breakthroughs in AI or a new Siri to unlock mid-to-long-term upside.**

**Apple’s vast hardware installed base offers a meaningful buffer period.** But without timely AI progress, it may face intensifying competition. Recent reports suggest OpenAI plans an AI phone that goes beyond the traditional 'app mode'.

Overall, Apple’s near-term print is solid, underpinned by iPhone 17 strength and best-in-class supply-chain management, preserving clear moat advantages. **Beyond this steady execution, investors want innovation that can re-rate the stock above its traditional range.** Management changes also signal a willingness to evolve, so watch guidance and strategy updates.

For Dolphin Research’s detailed read-through of Apple’s results, see below.

**I. Apple’s core remains strong**

**1.1 Revenue:** in FY26 Q2 (1Q26), Apple reported revenue of $111.2bn (+16.6% YoY), beating consensus ($109.7bn). All segments grew, led by an acceleration in iPhone.

By segment: **Hardware revenue grew 16.7% YoY,** primarily on iPhone strength. iPhone has delivered 20%+ growth for two straight quarters on iPhone 17 momentum.

**Services revenue grew 16.3% YoY,** sustaining double-digit growth. The resolution of Alphabet’s lawsuit reduced overhang, and with broader AI model integration, growth should continue even if App Store growth holds in the single digits.

**By region:** all posted YoY growth. The Americas, Europe, and Greater China are the three largest contributors. **The Americas kept a 40%+ mix, up 12% YoY,** and Europe grew 14.7%.

**Greater China led with 28% growth,** as state subsidies on iPhone 17 256GB directly drove a 33% YoY increase in Mainland iPhone sales.

**1.2 Margins:** FY26 Q2 (1Q26) GPM was 49.3%, up 220bps YoY and ahead of consensus (48.5%). Margin gains were driven by both Hardware and Services.

Breaking out: **Services GPM climbed to 76.7%, while Hardware GPM rose to 38.7% YoY,** **helped by iPhone 17 scale, lower tariff costs, and USD weakness vs. CNY.**

**1.3 Operating profit:** FY26 Q2 (1Q26) OP was $35.9bn (+21% YoY). Growth reflected both revenue expansion and higher GPM.

**Opex ratio was 17%, up 100bps YoY,** as Apple increased R&D across products and services, with R&D up 23% YoY this quarter.

**Capex was $1.97bn, down 36% YoY,** modest vs. peers deploying tens of billions per quarter on AI. Apple’s capex remains low as it lacks external DC biz.

**Apple is investing in AI, but much of it runs through R&D rather than capex,** given in-house silicon and no third-party DC footprint. R&D growth is accelerating, though the dollar amount remains small vs. hyperscalers’ chip purchases.

**II. iPhone: China-led outperformance against the market**

**FY26 Q2 (1Q26) iPhone revenue was $57.0bn (+21.7% YoY),** in line with consensus ($57.0bn). Growth was driven by iPhone 17 strength in China and USD/CNY tailwinds.

Dolphin Research analyzes volume vs. price to gauge the key drivers this quarter.

**1) Shipments:** per IDC, the global smartphone market fell 5% YoY in 1Q26. **Apple’s shipments rose ~5.5% YoY,** outperforming the market.

**Shipment growth came mainly from Mainland China,** where iPhone 17 256GB benefited from state subsidies and lifted iPhone sales by 33% YoY. The broader China market declined 3.6% YoY, making Apple the best performer there.

**2) ASP:** triangulating revenue and shipments, **iPhone ASP was ~$933, up ~15% YoY.** China benefited from iPhone 17 mix and FX tailwinds on both revenue and pricing.

**III. Hardware ex-iPhone: back to growth**

**3.1 Mac**

**FY26 Q2 (1Q26) Mac revenue was $8.4bn (+5.7% YoY),** ahead of consensus ($8.1bn).

Per IDC, **global PC shipments rose 3.8% YoY, while Apple’s PC shipments grew 12.7% YoY,** outperforming the market. **We estimate Mac ASP at $1,355, down ~6% YoY.**

Apple launched MacBook Neo (from $599, expanding the user base), M5 MacBook Air, and M5 Pro/M5 Max MacBook Pro, with Neo seeing strong reception.

**3.2 iPad**

**FY26 Q2 (1Q26) iPad revenue was $6.9bn (+8% YoY),** beating consensus ($6.65bn), driven by M5 Pro and A16 models.

Over half of iPads sold this quarter were to new users. iPad delivered double-digit growth in EMs such as India, Mexico, and Thailand.

**3.3 Wearables and other hardware**

**FY26 Q2 (1Q26) Wearables & Other revenue was $7.9bn (+5% YoY),** slightly above consensus ($7.7bn), led by wearables and accessories.

**IV. Services: ecosystem moat intact; eyes on new Siri**

**FY26 Q2 (1Q26) Services revenue was $31.0bn (+16% YoY),** beating consensus ($30.4bn). Despite allowing external links in the US App Store, Services maintained double-digit growth, underscoring the ecosystem moat.

Services GPM was 76.7% and continued to rise. **With a 28% revenue mix, Services generated 43% of company GP.**

Services hit all-time highs across both developed and emerging markets, with record revenue in ads, music, payments, and cloud. **App Store added a new ad slot in search results, and Apple Maps ads (focused on local merchants) will launch this summer in the US and Canada.**

Apple Intelligence now integrates dozens of features including vision AI and real-time translation. **Apple confirmed the new Siri will launch within the year.**

Apple views AI as a capability rooted in on-device silicon and edge processing, emphasizing privacy-first. With R&D growth outpacing the company’s overall growth, **AI spend represents incremental investment.**

**The resolution of Alphabet’s lawsuit removes a Services overhang.** Given Apple’s ecosystem control, even if App Store settles into single-digit growth, Services should still deliver double-digit growth overall.

**After procuring 'Gemini' services, Apple deepened its software partnership with Alphabet.** Gemini will provide trillion-parameter models and technical support, while compute will rely on on-device processing and Apple’s private cloud. If the new Siri lands well this year, it could both enhance AI utility and expand the growth runway.

**Dolphin Research archives on Apple:**

Jan 30, 2026 call takeaways: [苹果（纪要）：新版 Siri 将与谷歌合作，公司依然不放弃自研](https://longportapp.cn/zh-CN/topics/38265257)

Jan 30, 2026 earnings review: [iPhone 炸场、Gemini 助攻，苹果 AI 时代真来了？](https://longportapp.cn/zh-CN/topics/38257779)

Oct 31, 2025 call takeaways: [苹果（纪要）：加大 AI 投入，明年推出新版 Siri](https://longportapp.cn/zh-CN/topics/35831673)

Oct 31, 2025 earnings review: [苹果：iPhone 稳住 C 位，AI 何时露真容？](https://longportapp.cn/zh-CN/topics/35828799)

Sep 10, 2025 event review: [苹果：iPhone“小打小闹” 撑场面，AI 大招还得憋？](https://longportapp.cn/zh-CN/topics/33825264)

Aug 1, 2025 call takeaways: [苹果（纪要）：资本开支增长主要来自于 AI 相关投资](https://longportapp.cn/zh-CN/topics/32493092)

Aug 1, 2025 earnings review: [苹果：AI 难产，还得靠 iPhone 救场](https://longportapp.cn/zh-CN/topics/32486459)

Risk disclosure and disclaimer: [海豚君免责声明及一般披露](https://support.longbridge.global/topics/misc/dolphin-disclaimer)

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## Comments (2)

- **在埃及发呆的胖墩 · 2026-05-01T02:27:54.000Z**: Impossible, it's either going to start with a big drop or a slow, steady decline.
  - **在埃及发呆的胖墩** (2026-05-01T02:28:15.000Z): Moreover, the high proportion in mainland regions is risky.