---
title: "AAPL: Sticking with Price Hikes—How Long Can Hardware Leadership Hold?"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/294452403.md"
datetime: "2026-07-31T04:05:42.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/294452403.md)
  - [en](https://longbridge.com/en/news/294452403.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/294452403.md)
---

# AAPL: Sticking with Price Hikes—How Long Can Hardware Leadership Hold?

AAPL, in the morning of Jul 31, 2026 Beijing time, released FY26 Q3 (quarter ended Jun 2026) results after the U.S. close, with key takeaways below.

**1) Headline results: revenue of $109.4bn (+16% YoY)**, in line with consensus ($109.0bn). Growth was driven by iPhone, Mac and software services.

**GPM was 50.1%, up 360bps YoY.** Ex-tariff refunds of ~2%, quarterly GPM was roughly in line with market at ~48%. Software services GPM held at 75.6%, **hardware GPM was 40.1%, with a ~2.5% refund benefit; on an underlying basis, GPM fell ~100bps QoQ on storage cost inflation.**

**2) iPhone: this quarter** $Apple.US **iPhone revenue was $54.3bn (+22% YoY), slightly below consensus ($55.0bn).** Growth came from robust demand for the iPhone 17 family globally. **Dolphin Research estimates total iPhone shipments rose ~16% YoY, with ASP up ~5% YoY.**

**3) Non‑iPhone hardware: Mac grew 29% YoY**, led by MacBook Pro and MacBook Neo; iPad declined 6% YoY, while wearables and other devices delivered low‑single‑digit growth**.**

**4) Software services: revenue reached $30.7bn,** missing consensus ($31.2bn), up 12% YoY**.** With a 75.6% GPM, software contributed 28% of revenue but 42% of gross profit.

**5) Revenue by region: the Americas remained the core base, above a 40% revenue mix, up 11% YoY**; both Greater China and Europe grew over 20% YoY. **iPhone shipments in Mainland China rose 24% YoY this quarter (IDC).**

**Dolphin view: an AI safe haven, but growth to decelerate**

**Against elevated expectations, AAPL’s print looks a touch muted.** The top line broadly matched the Street. GPM benefited from roughly a 2% tariff refund; excluding that, GPM was ~48%, also in line with expectations.

**① Double‑digit revenue growth, led by iPhone 17**. **iPhone revenue rose 22% YoY, with the 17 series posting double‑digit gains in China and other overseas markets.** As storage prices climbed, many peers raised prices, while iPhone 17 held steady, drawing more consumers.

**② Margin uplift:** hardware GPM reached 40.1%, including an estimated ~2.5% tariff refund. **Ex‑refund, hardware GPM was ~37.6%, down ~120bps QoQ on higher storage costs.**

As AAPL targets mid‑to‑high‑end users, the storage cost impact is comparatively smaller than peers, and the company digested the pressure better.

**Beyond the quarter, management guided next‑quarter revenue up 9–11% YoY, or $111.7–113.8bn, with iPhone growing ~15%.** GPM is guided to 47–48%, implying underlying hardware GPM may fall another 100–150bps next quarter on storage and other inflation.

**With services growing steadily, we estimate non‑iPhone hardware revenue at $23.1–25.2bn next quarter, potentially down YoY (vs. $24.7bn a year ago).** Recent price hikes for Mac and iPad announced in late Jun suggest some demand was pulled forward.

Beyond earnings, the market focused on several areas:

**a) Strong growth in China**: the rebound was led by higher iPhone sales in China. **Shipments rose 24% YoY in China, while shipments outside China also climbed 19% YoY.**

**b) Resilience amid storage price inflation:** even with higher storage costs, overall GPM held at ~48%, and underlying hardware GPM at ~37.5% (ex‑refund).

This reflects supply‑chain strengths: **① long‑term memory procurement to lock in costs**; **② lowering component costs via in‑house baseband and more**; **③ product‑mix optimization and selective price adjustments.**

**c) AI strategy: on Jul 15, 2026, the Cyberspace Administration of China announced that 'Apple Intelligence' passed on‑device GenAI service filing.**

Overseas, AAPL integrates ChatGPT as an optional third‑party model within Apple Intelligence. As that approach cannot roll out in China, AAPL opted to partner with Alibaba, which should enhance competitiveness in China, spur upgrades, and lift consumer intent.

**AAPL’s current mkt cap is ~$4.9tn, implying ~35x FY27 PE (assumes 2‑yr revenue CAGR of ~12%, GPM 48.5%, tax rate 17.6%).** Historically, PE has ranged 25x–40x, placing the stock toward the upper‑mid of its band.

**With AI stocks correcting, AAPL emerged as a safe haven for two reasons: ① it has not followed with outsized Capex**, keeping quarterly Capex near $2–3bn while owning the core hardware edge; **② it has tangible earnings support,** and iPhone 17 has outperformed despite industry headwinds.

**Similar to MSFT not lifting Capex yesterday and being rewarded by the market,** AAPL has kept annual Capex just north of $10bn while earning over $100bn a year. **With concerns about AI Capex sustainability, a 'no rush to follow' stance drew incremental flows, lifting the FY27 multiple from ~29x to ~35x.**

**AAPL vs. the rest of Mag 6 shows a seesaw effect. On one hand, on‑device AI needs more storage and compute, while AI‑driven component inflation delays upgrades; on the other, AAPL’s lighter Capex contrasts with peers’ heavy outlays.**

**Given high expectations, this print was a touch 'plain', and guidance points to slower growth.** With the multiple now near ~35x, the stock is not cheap, especially as growth moderates.

**Flows rotating from 'AI' into AAPL were seeking certainty.** Management’s message of slowing growth may shake confidence. The iPhone 17 cycle is a success; attention turns to iPhone 18 and AI features. If AI lifts growth again, AAPL could break above its historical valuation range.

See below for Dolphin Research’s detailed take on AAPL’s print:

**I. iPhone 17 drives an acceleration**

**1.1 Top line: FY26 Q3 (2Q26) revenue was $109.4bn, +16% YoY**, in line with consensus ($109.0bn). Growth was propelled by iPhone and Mac.

By segment mix:

**① Hardware grew 18% YoY.** The acceleration was led by iPhone and Mac, with iPhone growth staying above 20% for three straight quarters on iPhone 17 strength.

**② Software rose 12% YoY,** maintaining double‑digit growth**.** More AI applications at scale could re‑accelerate software growth.

**By region,** **all major markets grew YoY.** The Americas, Europe and Greater China remained the top three. Specifically, **the Americas stayed above a 40% mix, up 11% YoY**; Europe growth accelerated to 22%.

**Greater China delivered high growth for a third straight quarter, up 22% this quarter.** With peers raising prices, AAPL held steady and took share. iPhone sales in Mainland China rose 24% YoY this quarter.

**1.2 Margins: FY26 Q3 GPM was 50.1%, up 360bps YoY.** A ~2% tariff refund lifted margins; ex that, GPM was near the 48% Street view**.** Underlying sequential pressure came from storage costs.

Dolphin’s split shows: **software GPM at 75.6%; hardware GPM at 40.1%, or ~37.6% ex the ~2.5% refund**, down ~100bps QoQ on storage inflation.

**1.3 OP: FY26 Q3 OP was $35.7bn, +27% YoY.** Growth was driven by higher revenue and GPM expansion.

**Opex ratio was 17.4%, up 90bps YoY.** R&D grew 23% YoY. **Capex was $2.46bn for the quarter, far below mega‑cap peers’ triple‑digit‑bn annualized pace,** and the restrained AI spend has recently attracted flows and supported the share price.

**II. iPhone: holding price, driving clear volume gains**

**FY26 Q3 iPhone revenue was $54.3bn, +22% YoY,** slightly below consensus ($55.0bn)**.** The growth was powered by the iPhone 17 series globally.

Dolphin looks at volume and price to parse the growth drivers:

**1) Shipments:** IDC shows the global smartphone market fell 6% YoY in 2Q26. **AAPL’s shipments rose ~16% YoY, well ahead of the market.**

**Android peers raised prices in 1H, while iPhone pricing held, winning more consumers.** In China, iPhone sales rose 24% YoY this quarter (vs. a 4% YoY decline for the market), the best among major brands.

**2) ASP:** based on revenue and unit estimates, **iPhone ASP was around $972 this quarter, up ~5% YoY.**

**III. Non‑iPhone hardware: Mac the only beat**

**3.1 Mac**

**FY26 Q3 Mac revenue was $10.4bn, +29% YoY, well above consensus ($8.9bn),** driven by MacBook Pro and the new MacBook Neo.

MacBook Neo’s differentiated design and value resonated globally, with supply still catching up; the M5‑based MacBook Air is the world’s best‑selling notebook; M5 Pro/Max MacBook Pro is a top choice for AI dev and creative workflows.

Mac excels in high‑throughput, on‑device inference and diverse AI workloads, positioned as an 'AI compute platform': **customers use Mac mini as agentic AI platforms, and deploy Mac Studio clusters to run frontier‑class models on‑prem.**

IDC indicates the global PC market was flat YoY this quarter, while AAPL’s PC shipments rose 8% YoY, outperforming. **Based on company and industry data, Dolphin estimates Mac ASP at ~$1,545, up ~19% YoY.**

**3.2 iPad**

**FY26 Q3 iPad revenue was $6.2bn, down 6% YoY,** below the $6.6bn Street view, impacted by a tough comp from last year’s A16 iPad launch.

**3.3 Wearables and other hardware**

**FY26 Q3 wearables and other hardware revenue was $7.9bn, +6.5% YoY,** in line with consensus ($7.9bn), driven by wearables and accessories.

**IV. Software services: steady double‑digit growth, eyes on Apple AI**

**FY26 Q3 services revenue was $30.7bn, +12% YoY,** slightly below consensus ($31.2bn)**.** Services GPM stayed at 75.6%, **with 28% of revenue generating 42% of total gross profit.**

**Specifically,** ads, App Store, AppleCare, music and video all hit record highs for the season, while cloud and payments set all‑time records. **Paid subscriptions now exceed 1.5bn, with over 2.5bn active devices, underpinning services growth.**

AAPL views AI not as a standalone feature but as capability built on chips and on‑device processing, with privacy first. With R&D growing faster than revenue, **AI is the incremental spend.**

**The core philosophy is 'privacy + personal context' AI,** with the latest models running partly on‑device and partly in private‑cloud servers.

**The Alibaba partnership in China should accelerate Apple Intelligence rollout.** AI should lift services while also stimulating hardware demand, a key lever for re‑acceleration.

<End of article\>

**Risk disclosure and disclaimer:**[**Dolphin Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer)

### Related Stocks

- [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md)
- [09988.HK](https://longbridge.com/en/quote/09988.HK.md)
- [89988.HK](https://longbridge.com/en/quote/89988.HK.md)
- [HBBD.SG](https://longbridge.com/en/quote/HBBD.SG.md)
- [BABA.US](https://longbridge.com/en/quote/BABA.US.md)

## Related News & Research

- [Moonshot has Nvidia chip cluster from Alibaba computing deal, Bloomberg News reports](https://longbridge.com/en/news/294536715.md)
- [U-Haul Extends 30 Days Free Storage Offer at All 60 Chicagoland Stores after Damaging Storms | UHAL Stock News](https://longbridge.com/en/news/294090393.md)
- [Market Analysis: SanDisk And Competitors In Technology Hardware, Storage & Peripherals Industry](https://longbridge.com/en/news/294493720.md)
- [AAPL Stock Alert: What to Know as Apple Partners With Klarna to Lease iPhones](https://longbridge.com/en/news/294104418.md)
- [In-Depth Analysis: SanDisk Versus Competitors In Technology Hardware, Storage & Peripherals Industry](https://longbridge.com/en/news/293914134.md)