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

Summary

Bloomberg Tech – Instant Reaction: Apple Slides After Supply Shortages Hurt Its Sales Forecast (July 30, 2026)

Episode Overview

In this episode, host Ed Ludlow, alongside Bloomberg Intelligence’s Anurag Rana and technology journalist Mark Gurman, provides immediate analysis of Apple's Q3 2026 earnings. Despite beating revenue and EPS expectations, Apple's stock slid in after-hours trading. The team breaks down the significance of the numbers, regional performance (particularly in Greater China), and the operational and strategic challenges Apple faces — especially with memory shortages and the looming transition in executive leadership. The discussion also explores what the next set of Apple products, including smart glasses and AI devices, could mean for the company’s future growth.

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Key Discussion Points & Insights

Apple Q3 2026 Earnings: The Numbers

• Total Revenue, Product, and EPS Beats ([01:34]–[03:23])
  • Revenue: $109.42 billion (vs. $108.85B expected)
  • EPS: $2.02 (vs. $1.89 expected)
  • Product revenue: $78.68 billion (vs. $77.25B expected)
  • iPhone revenue: $54.25 billion (vs. $53.6B expected)
  • Services revenue: $30.74 billion (missed $31.36B forecast)
  • Greater China revenue: $18.82 billion (below $19.58B expected)
• Stock Reaction
  • Despite beats, Apple shares dropped roughly 2.4% in after-hours trading.

"Apple is proud to report the strongest June quarter ever with double digit revenue growth across iPhone, Mac and services and in every geographic segment."
—Apple, as summarized by Bloomberg Host ([02:29])

Segment Performance: iPhone, Mac, Services, and China

• iPhone & Mac Dominate ([03:38], [04:52], [06:26])
  • Strong iPhone performance continues, with no price increases yet.
  • Mac business performs especially well; noted as “amazing” by Mark Gurman.
• Services and iPad Miss ([03:38])
  • Services revenue and iPad sales came in below expectations, but services are considered a greater concern for future growth than iPad.
• China’s Mixed Results ([04:52], [06:26])
  • China sales rebounded YoY but missed estimates.
  • Foldable iPhones predicted to succeed in China’s fast-growing foldables market.

"Service is a little soft and the China number missed the estimate we have here. But at the same time, that's pretty nice growth on an annual basis..."
—Mark Gurman ([06:26])

Margins, Price Strategies, and Memory Shortages

• Gross Margins & Accounting Effects ([03:38], [04:52])
  • Margins benefited from tariff refunds (added about 2 points to gross margin; 11 cents to EPS).
  • Analysts watch to see if Apple can maintain margins without raising lower-end iPhone prices.
• Outlook on Pricing
  • Memory costs are rising, but Anurag Rana suggests any price increases are best implemented on premium iPhones, not entry-level models.
• Memory Shortage as a Key Risk ([09:35])
  • Memory chip shortages impact costs and production; how Apple responds will be a key focal point for investors.

"I want to hear about the memory shortage. I know it's not sexy, but investors are interested in that."
—Mark Gurman ([09:36])

The Future: New Products and Leadership Transition

• Wearables, Foldables, and Smart Glasses ([07:10]–[08:14])
  • Wearables “have been light for a couple of years,” but the arrival of AI devices and smart glasses is predicted to significantly boost growth within three years.
  • Apple targeting the eyewear market, aiming for “premium” connected glasses.
  • Foldables seen as a major opportunity in China; AR glasses will emphasize tight iPhone integration.
• Vision Pro Headset on ‘Back Burner’ ([09:03])
  • Development continues, but product is “heavily deprioritized” compared to smart glasses; next version not expected until 2028/2029.
• Leadership: John Ternus Era ([08:27]–[10:43])
  • Mark Gurman sees the iPhone remaining at Apple’s core during Ternus’s expected 15-year tenure.
  • Ternus is unlikely to make abrupt changes publicly but is expected to quietly steer Apple toward new product categories, just as Tim Cook did after Jobs.

"I think Turnus[sic] will be CEO for the next 15 years... 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."
—Mark Gurman ([08:27])

"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])

What Analysts Want to Hear

• "What is your vision for the future?" ([10:52])
• "How will you create an AI devices strategy?"
• "How are you dealing with operational challenges like the memory shortage?"

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Notable Quotes & Memorable Moments

• On China’s Foldable Market
  "Foldables are taking over the smartphone market in China."
  —Mark Gurman ([06:26])

• On Wearables Driving Growth
  "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."
  —Mark Gurman ([07:10])

• On the iPhone’s Longevity
  "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."
  —Mark Gurman ([08:27])

• On Ternus’s Leadership Style
  "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])

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Timestamps for Key Segments

• Apple Q3 earnings breakdown starts: [01:34]
• Reaction to beats/misses and margin discussion: [03:23]–[04:52]
• Discussion of Greater China results: [04:52]
• Debate on pricing, memory cost, and future margin outlook: [05:14]
• Discussion of product lineup and leadership transition: [06:15]–[10:43]
• Analyst questions and wishes for the earnings call: [09:35]–[11:23]

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Conclusion

This instant reaction episode highlights Apple’s resilience in product sales and margins amid operational headwinds like memory shortages and uneven services performance. Panelists agree that although Apple is entering a phase of tougher comparisons for its iPhone business, future growth will likely be driven by significant bets on AI-powered wearables and smart glasses, with a leadership transition set to shape Apple’s strategic direction in the coming years.

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This summary omits advertisements, sponsor spots, and non-content sections per request.

Transcript

[Mark Gurman]

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[Ed Ludlow]

Where do you think the disconnect is happening?

[Mark Gurman]

There's this huge differences that exist in terms of what advisors think they're talking about their clients, what clients are actually hearing.

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[Ed Ludlow]

Bloomberg Audio Studios podcasts Radio News

[Bloomberg Host]

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

[Ed Ludlow]

Covering Apple. 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 A$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 forec. 109.42 billion versus 108.85 billion. We're now getting iPhone revenue as well. Tim.

[Bloomberg Host]

Yeah, the headlines crossing fast and furious. IPhone revenue coming in above estimates at $54.25 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 too. 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.

[Ed Ludlow]

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 mess on gross margin coming in at 50% 0.1%. 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.

[Ed Ludlow]

Yeah, Mark Gurman is going to join us too for the conversation in a little bit but he's also pointing across 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.

[Bloomberg Host]

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 SmartPH. 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 have the memory price, memory process to start hitting. The only place where I see slight hiccup is greater China. So we'll find out what happened here. But it's a very Minor, very minor.

[Bloomberg Host]

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, 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 a iPhone pro max. So it's not going to, that's not going to be the difference.

[Bloomberg Host]

Now we can be.

[Anurag Rana]

That's another reason why they did it's. 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. 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 story. So 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]

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.

[Bloomberg Host]

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 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]

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

[Mark Gurman]

Of course I'll be first in line.

[Bloomberg Host]

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]

You think people will buy those?

[Mark Gurman]

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

[Bloomberg Host]

Tell me about them.

[Mark Gurman]

Well, they're going there. Apple is not going to 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 mason bonnet 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 matter 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.

[Ed Ludlow]

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 Ternus's 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]

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.

[Ed Ludlow]

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]

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.

[Ed Ludlow]

Is it going to be? Is it.

[Mark Gurman]

Is that what it's going to be?

[Ed Ludlow]

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.

[Anurag Rana]

Yeah.

[Bloomberg Host]

$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 devices strategy? Well, I mean, the good news is I don't get a question. Because the bad news is he wouldn't

[Bloomberg Host]

answer that and just I was keeping track. That was three questions.

[Mark Gurman]

Well, you know, I'm a journalist.

[Bloomberg Host]

That's what these analysts do too.

[Ed Ludlow]

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.

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