Nov 2, 2026 · 24 min
Listen from 11:14
Listen at 11:14
Apple beats estimates but investors demand more
Earnings Special: Apple's Forecast Disappoints, Despite Topping Estimates
Apple’s results expose the gap between solid execution and the unusually high expectations surrounding its growth, products, services, and AI strategy.
- 1Apple beat quarterly revenue and earnings estimates, yet its shares fell because investors had priced in an exceptional result.
- 2Weak Greater China performance contrasts with India’s potential, while services growth, margins, memory costs, and supply constraints remain unresolved.
- 3Mark Gurman sees continuity under incoming CEO John Ternus, but Apple’s AI capabilities and product pipeline face rising scrutiny.
Don't miss
Mark Gurman says the iPhone Duo’s inner display has changed his workflow while acknowledging that severe availability problems limit its reach.
The brief
Apple exceeded quarterly revenue and earnings expectations and offered a stronger holiday outlook, but its shares fell as investors had already priced in an exceptional performance.
Anurag Rana examines iPhone demand, gross margins, memory costs, services growth, and the guidance Apple must provide to show that momentum can endure.
Greater China remains a weak spot amid competition and difficult comparisons, while India’s retail expansion and aspirational brand give Apple a potentially important growth market.
Mark Gurman says the iPhone 18 Pro and earlier models drove the beat, while the iPhone Duo’s supply constraints and revenue timing complicate the product story.
The discussion widens to Apple’s AI lag, possible pressure on services, and a pipeline spanning smart glasses, camera-equipped AirPods, a touchscreen MacBook Pro, and Home View.
Gurman describes the iPhone Duo’s inner display as workflow-changing despite severe availability problems, and expects supply to improve around February or March.
What was said on this episode
25 statements · 12 positive · 8 negative · 5 neutral
Higher memory costs are expected to compress Apple’s gross margins.
“we were expecting some kind of compression in the gross margins because of higher memory costs.”
Listen at 4:41
Apple shipments will shift from December into March and June quarters.
“there's going to be shipments that got moved. from the December quarter into the March and the June quarter.”
Listen at 5:08
Apple will sell about 15 million iPhone Duo units this year.
“we think they're going to be about 15 million units this year.”
Listen at 5:47
Apple services guidance around 10% growth would be fair.
“if they give a guidance right around 10%, I think that's fair.”
Listen at 6:29
China is one of Apple’s most important growth stories.
“China for me is one of the more important things.”
Listen at 8:49
China will remain Apple’s most important growth driver over three years.
“in the near three years, I think China remains the most important growth driver.”
Listen at 9:39
Apple must explain how it will maintain margins amid high memory prices.
“Tell me how are you going to maintain gross margins over the next, I would say, three to four quarters with memory prices up going so high?”
Listen at 9:50
Apple’s quarterly report is phenomenal despite limited product launches.
“this is a phenomenal report for Apple.”
Listen at 11:14
Apple’s December-quarter guidance will be less impressive.
“The big news, which I think will be less phenomenal, is the guidance for the December quarter.”
Listen at 11:16
iPhone Duo shortages could boost Apple’s results through next year’s Q2–Q4.
“The good news for Apple could be that we're going to see a very strong tailwind because of the supply chain shortages and give them positive numbers into Q2, Q3, Q4 of next year”
Listen at 12:36
iPhone Duo supply constraints will not hurt Apple.
“I don't think it'll hurt them.”
Listen at 12:56
iPhone Duo screen cracking was an isolated problem.
“it clearly was an isolated problem.”
Listen at 14:18
John Ternus’s appointment is not substantially changing Apple yet.
“nothing is changing a ton at Apple because of this, at least for now.”
Listen at 14:59
Apple will undertake additional cost-cutting.
“I expect more cost-cutting to happen.”
Listen at 15:10
Apple has shown no evidence it can convert cash reserves into a strong AI strategy.
“we've seen zero evidence from Apple that they're going to be able to successfully take advantage of that cash holding and trade that in for a strong AI strategy.”
Listen at 16:10
Apple’s Siri AI is far behind leading AI assistants.
“Siri AI is operating nowhere close.”
Listen at 16:40
Apple’s core AI product now works effectively.
“It means that the core AI product that Apple has finally works.”
Listen at 17:10
Apple services revenue will decline as users shift from Google search.
“that service's revenue is going to come down.”
Listen at 17:55
Next year will be extremely strong for AI wearables.
“next year is going to be an extremely strong year in terms of AI wearables.”
Listen at 18:51
Apple will release smart glasses next year.
“Smart glasses are going to be there.”
Listen at 18:57
Apple will release camera-equipped AirPods after delays.
“The AirPods with cameras, those have been off delayed. We're going to see those.”
Listen at 18:59
The U.S. midterm election outcome will have no impact on Apple.
“I think there's going to be no impact.”
Listen at 19:56
U.S. tariffs affecting Apple will not change regardless of election winner.
“No matter who wins, I don't see that changing.”
Listen at 20:05
The iPhone Duo’s inner screen substantially improves Gurman’s workflow.
“The inner screen is simply incredible. It's changed my workflow completely.”
Listen at 20:37
iPhone Duo availability will improve around February or March.
“February, March.”
Listen at 21:14
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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