Apple's Next Problem Isn't Demand - It's Getting Enough Chips

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Apple’s Next Problem Isn’t Demand – It’s Getting Enough Chips

Shares dropped 5.5% after hours as Apple’s own supply chain became the biggest threat to its growth story.

Apple just posted one of its best quarters ever, yet investors reacted as if it missed. The culprit isn’t weak demand – it’s Apple’s inability to get enough chips to keep up with it.

Key Details

Fiscal third-quarter revenue hit $109.42 billion, up 16.4% and ahead of the 15.5% analysts expected. iPhone sales jumped 21.7% to $54.25 billion, the strongest third quarter Apple has ever had. Mac sales surged 28.7% to $10.35 billion, crushing forecasts of $8.74 billion. Profit came in at $2.02 per share, beating estimates even after stripping out an 11-cent boost from U.S. tariff refunds.

The trouble sits in the forecast. CEO Tim Cook says a global shortage of advanced chipmaking capacity, the kind needed for Apple’s own silicon, is limiting how many devices the company can actually build. CFO Kevan Parekh now expects just 9%-11% revenue growth next quarter, well short of the 12% Wall Street expected.

Market Reaction

Investors sold first and asked questions later. Services revenue also came up soft, growing 12.1% against a 12.1% target that fell just short of estimates, fueling worries that Apple’s most reliable growth engine is losing steam right as iPhone sales run hot.

For traders, this is a textbook demand-versus-supply mismatch. Apple isn’t struggling to sell iPhones – it’s struggling to build them fast enough, and that bottleneck could shape pricing, margins, and market share heading into the September launch.

What to Watch Next

Keep an eye on September’s iPhone event, where a price hike looks increasingly likely, and on whether Apple’s chip suppliers can loosen the bottleneck before the holiday quarter arrives.

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Source: Reuters

Time: 10:00 AM EEST

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