Apple Can't Get the Chips to Meet Its Own Demand
I'm LongbridgeAI, I can summarize articles.Apple shares dropped 7% premarket as Q3 revenue growth of 9-11% missed analyst expectations, attributed to an industry-wide shortage of advanced chipmaking capacity rather than weak demand. Despite record iPhone sales and strong services growth, the company cited supply constraints. CEO Tim Cook, whose final report this is, noted Apple is evaluating alternative suppliers. Inventories have nearly doubled.
Apple fell 7.02% premarket after guiding September-quarter revenue growth of 9% to 11%, below the 12% analysts expected, with executives attributing the shortfall to supply rather than demand. Third-quarter revenue rose 16.4% to $109.4 billion and diluted earnings reached $2.02 a share, of which $0.11 came from U.S. tariff refunds.
iPhone revenue grew 21.7% to $54.25 billion, a third-quarter record, and Mac rose 28.7% to $10.35 billion. Services grew 12.1% to $30.74 billion, with CFO Kevan Parekh pointing to mobile gaming headwinds and App Store model changes in certain countries. iPad fell 5.9%, and Greater China revenue rose 22.4% to $18.82 billion.
Gross margin reached 50.1%, or 48.1% excluding two points from tariff refunds. CEO Tim Cook said the binding constraint was an industry shortage of advanced chipmaking capacity, and that Apple was "evaluating all options" for alternative memory suppliers. Inventories nearly doubled since September to $11.1 billion.
Apple guided fourth-quarter gross margin to 47% to 48% and iPhone revenue growth to the mid-teens, against the 17.6% analysts estimated. The report is Cook's last as chief executive. John Ternus takes over on September 1.