Apple Forecast Tops Estimates, Disappoints Investors

00:00 Ed Ludlow

It was all in the guide for the holiday quarter. And what’s amazing is that even in the low end growth of 7% to 10%, consensus for for the fiscal first quarter ’27, again the December quarter, was 6.1%.

00:13 Ed Ludlow

So it beat Wall Street expectations technically, but it just wasn’t good enough for investors.

00:18 Ed Ludlow

This will be the first quarter where the iPhone Duo shows up and the state of play is very much that demand for the iPhone duo is running ahead of Apple’s ability to supply.

00:26 Ed Ludlow

Those supply constraints are in a constrained environment, um is reflected in the guide. That’s the way that executives put it.

00:32 Ed Ludlow

Memory pricing in particular is still an issue, and so memory supply as well. Um and going forward, you know, they were asked when does that kind of imbalance, demand running ahead of Apple’s ability to supply change and and reverse and that that you know, it is too early to tell from that standpoint.

00:46 Ed Ludlow

Um, Apple acknowledging that it’s dealing with those sharply higher component costs.

00:50 Ed Ludlow

The quarter that Apple just reported, by the way, very strong. You know, beating on the top line, um in overall revenue, also on the the iPhone, but a miss in in wearables, home products and and accessories was notable as as well as iPad.

01:00 Ed Ludlow

Then there’s Greater China. So in the fiscal fourth quarter to close out fiscal ’26, Greater China revenues came in about a billion dollars below consensus.

01:09 Ed Ludlow

But Apple on the call, particularly CEO John Turnus, painted quite a positive picture. You know, citing third-party data, saying that Apple has the top three handsets in that market and from Apple’s point of view, they said that they recognized that they are taking market share.

01:21 Ed Ludlow

that they’re really pleased with those results. It was something that that the immediate reaction of Wall Street, um people were trying to understand what happened in China, but Apple’s uh overall view is pretty positive.

01:29 Ed Ludlow

This is Ed Ludlow for Bloomberg News in San Francisco.