Apple warns of supply issues despite ‘strongest June quarter’

During the third fiscal quarter of 2026, Apple reported revenue of $109.4bn, marking a 16% increase year-on-year. The outgoing CEO, Tim Cook, highlighted what he termed as the company's "strongest June quarter ever" in its July 30th report. However, Cook cautioned about potential supply issues for iPhones and other Apple products in the coming months, despite the company's robust performance.

The company's Q4 outlook, disclosed during a conference call with analysts and investors, is more cautious than initially anticipated, with growth expected between 9pc and 11pc, falling short of the analyst benchmark of over 12pc. This led to a 7% drop in Apple's shares. Third-quarter revenue for 2026 amounted to $109.4bn, up 16% year-on-year. iPhone sales reached $54.3bn, Mac computers at $10.4bn, iPads at $6.2bn, and wearables at $7.9bn for the period ending on June 27th.

Cook expressed optimism about high demand but warned of escalating challenges due to supply constraints, particularly in the DRAM market dominated by three suppliers. He elaborated that while a larger number of suppliers would alleviate supply and pricing issues, the rising prices of memory chips, a "100-year flood", would significantly impact Apple's business beyond September.

Cook noted that demand for Apple's products was currently higher than expected, driven by the strong iPhone and Mac product cycles. Recent price hikes on various Apple products were attributed to the surge in AI data centre demand for memory and storage, which Apple has never experienced at such a swift pace. On September 1st, John Ternus, the senior vice-president of hardware engineering, will take over from Cook as the company's new CEO.