Instant Reaction: Apple Slides After Supply Shortages Hurt Its Sales Forecast

Summary

Podcast Summary: Bloomberg Surveillance

Episode: Instant Reaction: Apple Slides After Supply Shortages Hurt Its Sales Forecast
Date: July 30, 2026
Hosts/Contributors: Ed Ludlow, Mark Gurman, Anurag Rana, Bloomberg Hosts

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Episode Overview

This episode delivers real-time analysis and reactions to Apple’s third-quarter 2026 earnings call, focusing on why Apple shares declined after their report, despite headline revenue and earnings beats. The panel of Bloomberg experts—featuring insights from Mark Gurman (Bloomberg News), Ed Ludlow (Bloomberg Tech), and Anurag Rana (Bloomberg Intelligence)—break down Apple’s numbers, explore the implications of supply shortages and margin shifts, and speculate on the company’s product and leadership roadmap for the years ahead.

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Key Discussion Points & Insights

1. Apple’s Q3 2026 Numbers: A Deeper Look

• Topline Results:
  • Revenue: $109.42 billion (beat vs estimate of $108.85B)
  • EPS: $2.02 (above $1.89 consensus)
  • Products Revenue: $78.68B (beat; est. $77.25B)
  • iPhone Revenue: $54.25B (strong; est. up to $53.6B)
  • Services Revenue: $30.74B (miss; est. $31.36B)
  • Greater China Revenue: $18.82B (miss; est. $19.58B)
  • Gross Margin: 50.1%, slightly above expectations, with an 11c EPS boost from tariff refunds
  • Apple shares fell ~2.4% after-hours.

(“Third quarter revenue again better than what the street was forecasting $109.42 billion versus $108.85 billion.” – Bloomberg Host, 01:36)

• Mixed Results Breakdown:
  • Strong beats in iPhone, Mac, gross margins
  • Misses in iPad and Services
  • China revenue a concern but showing annual improvements

(“The only place where I see slight hiccup is greater China. So we’ll see what happened here. But it’s very minor, very minor.” – Anurag Rana, 05:05)

2. Market Reaction and Reasons for Share Decline

• Despite beats, absence of strong guidance and lagging services and China sales led to post-market dip.
• Stock had already run up over 20% pre-earnings, so investor expectations were high.

(“Stock was up more than 22% going into this print.” – Ed Ludlow, 07:04)

• Concerns about ongoing memory chip shortages and services margin misses

(“...services, a little soft, and the China number missed the estimate we have here on the Bloomberg terminal.” – Mark Gurman, 06:27)

3. iPhone Momentum & Pricing Strategy

• iPhone sales continue to shine.
• Discussion on whether Apple can avoid raising prices with margins held steady due to tariff refunds.
• Suggestion: If price increases are needed, best to apply to higher-end models.

(“If they can figure out not to raise iPhone lower end prices, it’s going to be very good for them… it’s better to do it on the higher end phones because… people… are not sensitive to… another few hundred dollars on an iPhone Pro Max.” – Anurag Rana, 05:20)

4. The Future of Apple’s Hardware and AI Glasses

• Panel expects “one more good quarter” for iPhone, but tougher comparisons looming in 2027.
• Noted growth in Mac division and upcoming focus on AI-driven wearable devices, especially smart glasses.
• Mark Gurman forecasts Apple’s entry into high-end smart glasses, aiming to disrupt traditional eyewear rather than directly replace smartphones.

(“They think that their smart glasses are going to replace sort of the low end to mid-tier glasses market... It’ll have cameras built in. They’ll do all the stuff that Meta does, but a little bit more premium. And Apple-Y because it’ll integrate with your iPhone…” – Mark Gurman, 07:39)

5. Product Evolution and Leadership Horizon

• Ongoing role of iPhone as "center of everything" for Apple, with other devices (glasses, watch, earbuds) augmenting but not supplanting it.
• John Ternus (next CEO) is not expected to radically change company direction immediately but is anticipated to bring his own vision over time.
• Reflection on innovation under Cook compared to Jobs, and speculation about “next big thing” for Apple.

(“...Steve Jobs, arguably one of the greatest CEOs and visionaries of all time. Tim Cook came in there… he shook things up pretty quickly… You can bet Ternus is going to do the same thing.” – Mark Gurman, 10:09)

6. The Status of Vision Pro & Apple’s Mixed Reality

• Vision Pro—Apple’s mixed reality headset—is now “on the back burners of all back burners.”
• A lighter revision is in development, possibly not launching before 2028/2029.
• Apple is prioritizing smart glasses, both with and without AR displays, for near-future launches.

(“Has Apple given up on the Vision Pro? It's on the back burners of all back burners at this point.” – Mark Gurman, 09:03)

7. Analyst Questions & Lingering Uncertainties

• What is Ternus’ vision for Apple’s next phase and AI device strategy?
• How will Apple deal with lingering memory shortages (other than possible price hikes)?
• Investors hoping for more concrete leadership messaging and future guidance from the call.

(“If I were able to… ask a question, I would straight up ask Ternus: What is your vision for the future of this company?... How are you going to create an AI device strategy…” – Mark Gurman, 10:53)

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Notable Quotes & Memorable Moments

• Mark Gurman on iPhone’s staying power:
  “I think it’s going to be the case that we’re always going to carry something in our pocket, the iPhone or something like it is always going to be at the center of everything.” (08:28)

• Anurag Rana on product cycles:
  “This is not a company you can grow iPhone 22% year after year... This is a replacement cycle.” (05:46)

• Mark Gurman on new product expectations:
  “Glasses are going to shoot those numbers up. I do [think people will buy those]. I think you’ll buy them too.” (07:34)

• Mark Gurman on Apple’s CEO transition:
  “He’s [Ternus] not going to come on and say he’s going to do things differently than his predecessor. He’s going to go on and say how incredible Tim Cook has done. And even if I do half of what you do, it’ll be a success.” (10:09)

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Key Timestamps

• 01:36 – Initial rundown of Apple's numbers
• 02:30 – Detailed analysis on iPhone, dividend, China revenue
• 04:53 – Rana’s take on iPhone margin strategy
• 06:27 – Gurman’s initial hot takes (iPhone, Mac, services, China)
• 07:39 – Gurman on Apple’s smart glasses strategy
• 09:03 – Gurman: Vision Pro on "back burner"
• 10:09 – Gurman on Ternus, company direction, and legacy
• 10:53 – Gurman’s “if I could ask Ternus” question

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Conclusion

This roundtable provides a comprehensive, fast-paced analysis of Apple’s Q3 2026 earnings, blending hard financial numbers with strategic insight and forward-looking speculation. The experts probe Apple’s product transitions, leadership, and ongoing supply chain issues, while underscoring the company’s heavy reliance on the iPhone and its high-stakes push into new hardware categories—particularly in wearables and AI. For investors and Apple watchers, the main story remains the company’s quest to chart a new phase of growth while managing old and new challenges.

Transcript

[Mark Gurman]

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[Ed Ludlow]

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[Bloomberg Host]

Bloomberg Audio Studios podcasts Radio News

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this is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the covering Apple

[Bloomberg Host]

Queen of Goyal with us from Bloomberg Intelligence Anuragrana as well and Ed Ludlow, host of Bloomberg Tech. So let's get to the numbers. Third quarter revenue 109.42 billion. That's a beat. 108.85 is what the street was expecting. Third quarter EPS $2.02 a share. That is definitely above what the street was forecasting of $1.89 a share. If we go to third quarter products revenue 78.68 billion. That too is the street estimate of 77.25 billion. Services revenue 30.74 billion. A little bit light 31.36 billion. And again we're kind of highlighting here on the Bloomberg what we call our red sticky, our red headlines. Third quarter revenue again better than what the street was forecasting 109.42 billion versus 108.85 billion. We're now getting iPhone Revenue as well. Tim.

[Mark Gurman]

Yeah.

[Ed Ludlow]

The headlines crossing fast and furious. IPhone revenue coming in above estimates at $54.25 billion. The estimates for 50, $53.6 billion shares. Apple down about 2.4% in the after hours. Apple also declaring a cash dividend of $27 a share. Third quarter graded China revenue coming in shy of estimates at $18.82 billion. The estimate was for $19.58 billion. Apple shares falling about 2.4% in the post market when these numbers crossed they did shoot higher ever so slightly. You know watch the after hours carefully and with caution. We haven't heard yet what they're going to say on the call. Very light commentary to Apple is want to do in their press release. Just saying that the company is proud to report the strongest June quarter ever with double digit revenue growth across iPhone, Mac and services and in every geographic segment.

[Bloomberg Host]

This is Tim Cook setting June quarter records for both EPS and operating cash flow. Still here with our team. Ed Ludlow, I want to bring you back in here. I know you're just kind of going through the numbers to initial thoughts here. Again we continue to see the stock down about 2 1/2% here in the aftermarket.

[Bloomberg Analyst]

Yeah, it's a slight beat against consensus or expectations across the board. Other in iPad I see a mess and then in services I see a miss on gross margin coming in at 50.1%. Apple does explain that there was roughly 2 percentage points benefit gross margin from tariff refunds. So we can, we can relitigate that on the accounting side. But EPS therefore includes an 11 cent benefit from those tariff refunds. But that's what I see. You know Tim summed it up well, the greater China will be a question.

[Mark Gurman]

Right.

[Bloomberg Analyst]

But I see iPad miss and services miss services more likely to be a concern if it's a miss than iPad maybe, but otherwise strong.

[Bloomberg Host]

Yeah, Mark Gurman is going to join us too for the conversation in a little bit but he's also pointing out gross gross margin slightly above what Wall street wanted. But again the stock down about 2%. But let's not forget the stock has been on quite a rally so far this year. What? You're looking perplexed.

[Mark Gurman]

Yeah, I am.

[Ed Ludlow]

I want to bring in an Iraq he anurag. I know that you expected that the string of strong iPhone results would continue this quarter next given the company hasn't raised prices for smartphones. Has your view changed at all given what we've seen in the last few minutes with, with, with these numbers coming out?

[Anurag Rana]

No There was a beat on the iPhone number so that's there. But here is the kicker and I'm looking at gross margins which was also pretty decent, which was a. Now that's a surprise because you would

[Ed Ludlow]

have the memory price.

[Anurag Rana]

Memory prices to start hitting. The only place where I see slight hiccup is greater China. So we'll what happened here. But it's a very Minor, very minor.

[Ed Ludlow]

Ms. Anurag, are you saying that Apple doesn't need to raise prices because their margins are intact?

[Anurag Rana]

I hope. See for their sake, if they can figure out not to raise iPhone lower end prices, it's going to be very good for them. I think you have to raise prices first of all because the memory costs are very high. But I think you, and we think it's better to do it on the higher end phones because you know, people like you are not sensitive to, you know, another few hundred dollars on an iPhone pro max. So it's not going to. That's not going to be the difference.

[Ed Ludlow]

Now we can be.

[Anurag Rana]

That's another reason why they did that. That's another reason why they did that. So the thing is I think there is one more good quarter of iPhone coming in. But then things get harder for them next year because then comparisons get tough. You know, this is not a company you can grow iPhone 22% year after year. You know, this is not a brand new product. This is a replacement cycle. You could see a little bit of a push for people pulling forward some of these things but things are going to get hard next year when you get into tougher comparison.

[Ed Ludlow]

I want to bring in Mark Gurman. He's back with us. Apple shares down in the after hours. Mark is Bloomberg news managing editor for global consumer tech. You were live blogging while you were on tv.

[Anurag Rana]

Yes.

[Ed Ludlow]

What's your take?

[Mark Gurman]

My take is that the iPhone number looks great. My take is that the Mac number looks amazing. My take is that service is a little soft and the China number missed the estimate we have here on the Bloomberg terminal. But at the same time that is, you know, pretty nice growth on an annual basis where they were sort of, I guess in the toilet in China a couple of years ago and last year. But they've totally rebounded there. It's going to be interesting to see how the foldable iPhone performs there as a status symbol. Well north of two grand. So I think it's going to be a hot product there, especially because foldables are taking over the smartphone market in China.

[Ed Ludlow]

Yeah, I know you're going to Buy a foldable phone.

[Mark Gurman]

Of course, I'll be first in line.

[Ed Ludlow]

So is it, so is it the light services in China that's moving the stock lower? I mean, I know stock was 20 up to more than 22% going into this print.

[Mark Gurman]

Yes, yes. I mean, they smashed Mac. Right. But like, I don't think investors have fully grasped the importance of the Mac at this point. I mean, it sort of feels like an afterthought compared to the iPhone and the iPad. The iPad is always light. Wearables have been light for a couple of years now because they haven't really done a ton there. But that is going to accelerate big time over the next three years with these AI devices. Glasses are going to shoot those numbers up.

[Ed Ludlow]

Do you think people will buy those?

[Mark Gurman]

I do. I think you'll buy them too.

[Ed Ludlow]

Tell me about them.

[Mark Gurman]

Well, they're going, Apple is not going necessarily after the smartphone market. They're looking to create glasses that people want to wear just like the Apple Watch replace the traditional watch market. They think that their smart glasses are going to replace sort of the low end to mid tier glasses market. Not the Maison Bonnets of the world, but you know, the SLR luxotticas of the world. So they're really going to go after those brands there. It'll have cameras built in, they'll do all the stuff that Meta does, but a little bit more premium. And Apple Y because it'll integrate with your iPhone, whereas they've really held back iPhone integration with the metal glasses over the past couple of years.

[Bloomberg Host]

Do they actually create something that is competitive in terms of share at the company that moves the needle in terms of the iPhone? Does something else finally come over in terms of contributing more to the bottom line and the top line?

[Mark Gurman]

You know, I think Turnus will be CEO for the next 15 years unless again, something goes wrong that we're not expecting. And someone asked me earlier today on one of the programs what's going to be the most important product in Turnus, his tenure. And I, to their surprise, said the iPhone. I think it's going to be the case that we're always going to carry something in our pocket, the iPhone or something like it is always going to be at the center of everything. And then we're going to be augmented by glasses, watches, earbuds, you name it. But at some point there will be a transition to be had. I just don't see it anytime in the near future.

[Ed Ludlow]

Has Apple given up on the Vision Pro?

[Mark Gurman]

Has Apple given up on the Vision Pro? It's on the back burners of all back burners at this point. There's a revamped version that's lighter in development. I don't anticipate it before the end of 28 or early 29. Could go further back from that because they have been heavily prioritizing this glasses push. Smart glasses with no display. Smart glasses with AR display. They've got a long roadmap of multiple generations ahead of both of those categories. And you'll see them introduce the glasses strategy as early as June of next year.

[Bloomberg Host]

What do you want to hear on the call?

[Mark Gurman]

I want to hear about the memory shortage. I know it's not sexy, but investors are interested in that. I want to hear about Tim Cook's thoughts on how the transition is going. Most importantly, I want to hear Turner's vision for Apple. Are we going to hear that on this call? We're going to hear that on the next call? Probably not. These guys don't really say anything.

[Ed Ludlow]

I'm laughing because, you know, you said you shared with us earlier about John Ternus and Tim Cook being dressed identically. Like, you know, his vision is going to be whatever Tim Cook says the vision.

[Bloomberg Host]

Is it going to be? Is it.

[Mark Gurman]

Is that what it's going to be?

[Bloomberg Host]

Yeah.

[Mark Gurman]

No, I think that. I mean, he's going to come in and make major changes to the company. Just like, you know, Steve Jobs, arguably one of the greatest CEOs and visionaries of all time. Tim Cook came in there. It's not like he took a wrecking ball, but he shook things up pretty quickly. He was the one who instated the buyback program. He was the one who instated environmental initiatives. He was the one who instated tons of new product lines. And you can bet Ternus is going to do the same thing. And so we'll see how long that takes. But he's not going to come on and say he's going to do things differently than his predecessor. He's going to go on and say how incredible Tim Cook has done. And even if I do half of what you do, it'll be a success.

[Ed Ludlow]

$5 trillion market cap, pretty close to it. Expectations were high going into this print. What's the question that if you were able to ask a question on the call today, what would it be?

[Mark Gurman]

If I were able to answer or ask a question, I would straight up ask Ternus. What is your vision for the future of this company? How are you going to get to this next stage of growth and how are you going to create an AI device strategy. Well, I mean, the good news is I don't get a question because the bad news is he wouldn't answer that.

[Ed Ludlow]

And just I was keeping track. That was three questions.

[Mark Gurman]

Well, you know, I'm a journalist.

[Ed Ludlow]

That's what these analysts do, too.

[Bloomberg Host]

But if he's not going to answer a question about vision, and you kind of know that, where else would you. What else would you want to know?

[Mark Gurman]

I would want to drill down into his operational expertise and get his viewpoint, as someone who's not from the operations department, about the memory shortage, how long he sees that running for, and what work is going on internally to solve that other than just hiking prices.

[Anurag Rana]

Foreign.

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