Episode summary
Apple Sales Meet Estimates, China Is a Weak Spot
Bloomberg Businessweek Daily
· · 11 min · Hosts: Carol Massar, Tim Stenovec · Guests: Mark Gurman
Summary
Apple’s September quarter came in slightly ahead of expectations, with revenue rising 12% to $114.5 billion and iPhone revenue climbing 17% to $57.6 billion, but the report also showed clear weak spots. Mark Gurman said the big story was the company’s guidance and the strength of the iPhone duo, arguing that Apple is getting a major boost from pent-up demand and constrained supply, even if that makes revenue timing harder to read.
The weak point was Greater China, where sales missed estimates, and services also looked like it was slowing. Gurman said the services deceleration is tied in part to AI changing search behavior, because Apple gets a meaningful share of services revenue from Google search traffic in Safari. He argued Apple still has strong cash generation, but has not shown evidence that it can turn that into a winning AI strategy.
The quarter was also the first under CEO John Ternus, though Gurman said most of Apple’s current initiatives were set in motion under Tim Cook. He expects Ternus to push the company to run faster and leaner, with more cost cutting and layoffs likely, even as Apple’s product pipeline into next year remains full.
Key takeaways
- Mark Gurman said Apple’s quarter was strong overall, with revenue up 12% to $114.5 billion and iPhone revenue up 17% to $57.6 billion.
- He said Greater China was the main miss, making Apple’s results a mixed report despite the top-line beat.
- Gurman expects Apple to keep cutting costs under John Ternus, including more layoffs and a leaner operating style.
- He said services growth is slowing partly because AI tools like ChatGPT and Gemini are reducing Google search traffic inside Safari.
- Gurman said Apple’s near-term upside is still tied to iPhone duo demand and supply shortages, which could support future quarters.
Notable quotes
“so this is a phenomenal report for Apple. The big news, which I think will be phenomenal is the guidance, uh, for the December quarter”
“The other piece here is Greater China and services, both, uh, either a big fall or a strong deceleration”
“I expect more cost cutting to happen”
How the episode opens
Mark. We keep reading everything you've got on the blog. I don't know how he's doing it.
He's live blogging, he's on TV, he's on radio. It is. It is digital doing it all.
Maybe it's his digital twin. No. It's really that's really Mark Gurman, I think.
Yeah, just down about 3/10 of a percent here in the aftermarket. Um, where should we go? Where should we start when it comes to the Apple story right now?
Well, let's let me give the backdrop. No regular iPhone 18. The iPhone 18 Pro is the most minor European upgrade we've seen in a long time.
Nobody can find an iPhone duo, no iPhone air two. All the major fall products the MacBook Pro with touch, the Home View, the HomePod mini, the Apple TV, the All That iPad. None of them launch until the holiday quarter get they still beat and they beat because of the iPhone 18 Pro.
Uh, likely. Also from continued demand for the iPhone 17 Pro, Promax and all the carrier deals you saw, uh, earlier in the quarter. Uh, so this is a phenomenal report for Apple.
The big news, which I think will be phenomenal is the guidance, uh, for the December quarter, Given the backdrop of everything I explain, it all comes down to how the iPhone do what was going to perform. Uh, and so far, uh, the iPhone duo supply is very difficult to understand. New pre-orders didn't come.
Uh, aren't launching until the end of January for many buyers. You can't get them at retail stores right now unless you're in I bought. Uh, so I'll be interested to see the commentary there and what the numbers actually turn out to be.
The other piece here is Greater China and services, both, uh, either a big fall or a strong deceleration.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- apple quarterly results
- china weakness
- iphone strength
- ipad and wearables slowdown
- analyst estimates vs actuals
Companies and tickers mentioned
- AAPL
- Apple
Watch the episode
Watch “Apple Sales Meet Estimates, China Is a Weak Spot” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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