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

Summary

---

Podcast Summary: Bloomberg Talks

Episode: Instant Reaction: Apple Slides After Supply Shortages Hurt Its Sales Forecast
Date: July 30, 2026
Host: Bloomberg
Guests: Khunim Goyal (Bloomberg Intelligence), Anuragrana (Bloomberg Intelligence), Ed Ludlow (Host, Bloomberg Tech), Mark Gurman (Bloomberg News Managing Editor for Global Consumer Tech)

---

Episode Overview

This episode delivers Bloomberg's rapid analysis and expert commentary on Apple's latest quarterly earnings release and the immediate market reaction. Despite Apple beating revenue and earnings estimates, supply shortages and a miss in services and Greater China revenue led to a slide in Apple shares during afterhours trading. The discussion examines the numbers, underlying business trends, product performance, and the strategic future of Apple, including insights into upcoming products and leadership shifts.

---

Key Discussion Points & Insights

1. Apple's Q3 2026 Results: By the Numbers

• Revenue: $109.42 billion, beating the consensus estimate of $108.85 billion
• EPS: $2.02 per share, above the expected $1.89
• Product Revenue: $78.68 billion (estimate: $77.25 billion)
• Services Revenue: $30.74 billion, slightly below the $31.36 billion forecast
• iPhone Revenue: $54.25 billion (estimate: $53.6 billion), beating expectations
• Greater China Revenue: $18.82 billion, below the estimated $19.58 billion
• Gross Margin: 50.1% (benefited by 2 percentage points from tariff refunds)
• Stock Reaction: Apple shares fell about 2.4% in after-hours trading despite the beats
• Dividend: Declared at $27 per share
  [Timestamps: 01:36–02:29, 03:23–03:38]

Notable Quote:

"Third quarter revenue again, better than what the street was forecasting... iPhone revenue coming in above estimates at $54.25 billion."
— Bloomberg Host (02:29)

---

2. Analyst Insights and Market Interpretation

Slightly Mixed Results Despite Beats

• All major categories beat forecasts except iPad and services, with services' gross margin miss seen as more important than iPad.
• Gross margin supported by tariff refunds, impacting stated EPS.
  [Timestamps: 03:38–04:19]

Expert View:

"A slight beat against consensus or expectations across the board. Other than iPad I see a miss and then in services I see a miss on gross margin... Services more likely to be a concern if it's a miss than iPad maybe, but otherwise strong."
— Bloomberg Analyst (03:38)

Geographic Weakness: Greater China

• Minor miss in Greater China, but market focus may exaggerate its importance.
  [Timestamps: 04:53–05:15]

On China:

"The only place where I see slight hiccup is Greater China. So we'll see what happened here but it's a very minor, very minor miss."
— Bloomberg Analyst (04:53)

Pricing and Margin Pressure

• Debate over Apple’s pricing policy: Should they raise iPhone prices? Argument that higher-end phone buyers are less price-sensitive, and Apple may only need to raise prices on flagship models.
  [Timestamps: 05:15–05:43]

On Pricing Strategy:

"If they can figure out not to raise iPhone lower end prices, it's going to be very good for them... 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."
— Bloomberg Analyst (05:20)

---

3. Future Challenges and Replacement Cycles

• Apple’s iPhone growth will get harder as it cannot sustain >20% growth annually; the cycle is mostly replacements, not new users.
• One more strong quarter is expected before tougher comparisons next year.
  [Timestamps: 05:46–06:16]

On Future Growth:

"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. This is a replacement cycle."
— Bloomberg Analyst (05:46)

---

4. Product Pipeline and Strategic Shifts

Mac and Services

• Mac sales posted strong growth, but services were under expectations.
• Analysts think investors underappreciate the Mac’s importance.
  [Timestamps: 06:26–07:10]

On Mac vs. Services:

"I don't think investors have fully grasped the importance of the Mac at this point. It sort of feels like an afterthought compared to the iPhone and the iPad. The iPad is always light."
— Mark Gurman (07:10)

Apple Wearables and Upcoming Smart Glasses

• Wearables have been flat, but next three years expected to bring significant AI device growth, especially Apple smart glasses.
• Apple aims to disrupt the glasses market by targeting low- and mid-tier brands, not luxury. Integration with iPhone expected to be key differentiator. [Timestamps: 07:10–08:14]

Notable Quote:

"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 replaced the traditional watch market... Apple Y because it'll integrate with your iPhone."
— Mark Gurman (07:38)

---

5. Vision Pro and Leadership Transition

Vision Pro

• Vision Pro AR/VR headset is "on the back burners of all back burners." A lighter version is in the works, but focus has shifted to smart glasses, with a launch targeted as early as June next year.
  [Timestamps: 09:01–09:35]

On Vision Pro:

"It's on the back burners of all back burners at this point... they've been heavily prioritizing this glasses push. Smart glasses with no display. Smart glasses with AR display. They've got a long roadmap."
— Mark Gurman (09:03)

Leadership under John Ternus

• Tim Cook is expected to set the narrative for Ternus, who will ultimately chart his own course, similar to how Cook took over from Jobs.
• No major strategy announcements expected on earnings calls; Apple's leadership rarely reveals future plans during these.
  [Timestamps: 10:09–10:44]

On New CEO Expectations:

"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."
— Mark Gurman (10:09)

---

6. Top Questions for Apple Management

• Mark Gurman would press new leadership directly on long-term vision and AI device strategy, but notes such questions are rarely answered.
• Operational expertise around ongoing memory shortages and strategies to address them, beyond simply raising prices, are of prime investor interest.
  [Timestamps: 10:53–11:23]

Memorable Moment:

"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, the good news is I don’t get a question because the bad news is he wouldn’t answer that."
— Mark Gurman (10:53)

---

Notable Quotes & Memorable Moments

• On market expectations:
  "Stock has been on quite a rally so far this year." — Bloomberg Host (04:19)

• On Chinese market risk:
  "It's going to be interesting to see how the foldable iPhone performs there as a status symbol. Well north of two grand." — Mark Gurman (06:26)

• On Apple’s innovation cycle:
  "At some point there will be a transition to be had. I just don't see it anytime in the near future." — Mark Gurman (08:28)

• On the secretive nature of Apple earnings calls:
  "These guys don’t really say anything." — Mark Gurman (09:37)

• Lighthearted banter:
  "Of course I'll be first in line."
  — Mark Gurman, on buying Apple’s foldable phone (07:01)

---

Important Timestamps & Segments

• 01:24–02:29: Initial Apple earnings headlines and market reaction
• 03:23–04:19: Analyst initial takes and gross margin discussion
• 04:35–06:16: In-depth discussion about iPhone performance and pricing strategy
• 06:26–08:14: Mark Gurman on China, Macs, wearables, and Apple’s device strategy
• 09:01–09:35: Vision Pro status and Apple's AR roadmap
• 10:09–11:23: Apple leadership transition and the importance of operational execution
• 10:53–11:23: What analysts and journalists most want management to address

---

Overall Tone & Style

The conversation is fast-paced, analytical, and driven by real-time data—typical of Bloomberg's business coverage. There is a mix of candor, humor, and deep expertise, particularly from Mark Gurman, who provides strategic context and challenges facing Apple's leadership and business units. The hosts and analysts blend financial analysis with tech industry insight, addressing both numbers and future strategy.

---

Summary

This earnings call analysis dissects Apple's strong headline beats and the market’s less enthusiastic reaction, digging into missed expectations for services and Greater China, as well as product pipeline pressures. Experts agree the iPhone’s runaway growth is unsustainable, with future hopes pinned on new product categories like AI wearables and smart glasses, while hints of leadership transition add anticipation (and skepticism) about Apple’s next stage. The discussion underscores Apple's strengths while not shying away from emerging risks and the need for innovation to drive future growth.

---

Transcript

[Financial Expert]

I don't love the word retirement because I think it has negative baggage. I like the word financial independence. If you were to be financial independent, like how would you spend your time? I think that's a better way to think about the end of life stage versus quote unquote retirement.

[Bank of America Announcer]

Introducing B of A Rewards a new way to reward your every ambition. It all starts with a Bank of America checking account and grows from there. You get cash back deals on brands you know and love, plus a credit card rewards bonus helping you earn more rewards on things you buy every day. Join B of A Rewards today for rewards tailored to your lifestyle. What would you like the power to do? Bank of America Open or enroll your [e-mail] bfarewards bank of America Corporation all rights reserved.

[Karen Moscow]

Get the news you need in just 15 minutes.

[Nathan Hager]

Start your day with Bloomberg Daybreak, the podcast with a global view on the stories that matter. I'm Nathan Hager.

[Karen Moscow]

And I'm Karen Moscow. Join us each morning for curated stories on current events, politics, business and foreign

[Nathan Hager]

relations, plus one conversation on the day's biggest developments, all in just 15 minutes.

[Karen Moscow]

Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter.

[Nathan Hager]

Listen to Bloomberg Daybreak each morning on Apple, Spotify or anywhere you listen.

[Bloomberg Host]

Bloomberg Audio Studios Podcasts Radio News

[Bloomberg Analyst]

this

[Nathan Hager]

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

[Bloomberg Host]

Khunim 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 better than 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.

[Bloomberg Host/Interviewer]

Yeah, the headlines crossing fast and furious. IPhone revenue coming in above estimates at 54. $4.25 billion. The estimates for $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 Greater 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 a half percent 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. Right. 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.

[Bloomberg Host/Interviewer]

Yeah, I am. I want to bring in an Iraq he on Iraq 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?

[Bloomberg Analyst]

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 have the memory price right, your memory process 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 miss on.

[Bloomberg Host/Interviewer]

Are you saying that Apple doesn't need to raise prices because their margins are intact?

[Bloomberg Analyst]

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.

[Bloomberg Host/Interviewer]

Now we can leave.

[Bloomberg Analyst]

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.

[Bloomberg Host/Interviewer]

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.

[Bloomberg Analyst]

Yes.

[Bloomberg Host/Interviewer]

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.

[Bloomberg Host/Interviewer]

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

[Mark Gurman]

Of course I'll be first in line.

[Bloomberg Host/Interviewer]

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.

[Bloomberg Host/Interviewer]

Do you think people will buy those?

[Mark Gurman]

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

[Bloomberg Host/Interviewer]

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. They'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 at 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.

[Bloomberg Host/Interviewer]

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? Are we going to hear that on the next call? Probably not. These guys don't really say anything.

[Bloomberg Host/Interviewer]

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, 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.

[Bloomberg Host/Interviewer]

$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.

[Bloomberg Host/Interviewer]

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

[Mark Gurman]

Well, you know I'm a journalist.

[Bloomberg Host/Interviewer]

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.

[Karen Moscow]

Foreign.

[Bloomberg Tech Announcer]

AI is entering its most consequential phase, where scale, safety and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance and policy examine the defining trade offs shaping the future of AI. Thank you to our presenting sponsor, Salesforce, and supporting sponsors Ida Ireland and Schneider Electric. Learn [e-mail] TechLondon.