Apple has delivered another record-breaking quarter, but its latest financial results and forward guidance have done little to excite investors.
Despite beating Wall Street expectations, attention has quickly shifted from impressive headline revenues to a less encouraging outlook for profitability.
Figures
For the September 2026 quarter, Apple reported revenue of $114.5 billion, up 12% year-on-year, with earnings per share rising 14% to $2.10.
Gross margin reportedly stood at 47.9%, although this included an approximately one percentage-point benefit from tariff refunds.
Outlook
The problem lies ahead. Apple expects gross margins to fall to between 45% and 46% for the December quarter, traditionally one of its most important trading periods.
Rising memory-chip prices are a significant contributor, alongside additional costs associated with developing and introducing its artificial intelligence capabilities.
The forecast represents a notable deterioration at a time when investors are looking for continued earnings momentum.
Services revenue, another important source of higher-margin income, is also expected to grow by just 8% to 9%, below market expectations. Consequently, even the reported prospect of record holiday-quarter sales has failed to provide much reassurance.
New products
There are also questions surrounding Apple’s ambitious new iPhone Duo, its first foldable smartphone. Apple has yet to disclose sales figures or provide meaningful information about customer demand.
Independent industry estimates reportedly suggest shipments of approximately five to six million units during 2026, relatively modest against Apple’s enormous iPhone business.
Struggle for market share?
The Duo faces an uphill battle. Its premium pricing, approaching $2,000 in the U.S., places it firmly in niche territory, while foldable phones remain a relatively small segment of the global smartphone market.
High production costs and durability concerns could further restrict its appeal.
Apple remains an exceptionally profitable business, but investors are increasingly questioning how much further growth can be achieved without sacrificing margins.
For now, record revenues are not enough. The market wants evidence that Apple’s next generation of products and AI investments can deliver sustainable profits.
Editorial note: Apple has not published iPhone Duo sales figures. The five-to-six-million-unit estimates are independent analyst forecasts, not confirmed sales.