Q3 results: 3D pricing, EGOT timing, and underestimating demand

Apple's third quarter results have generated quite a bit of discussion, with the company's CEO Tim Cook marking this as his final earnings call as the company's leader. While the record-breaking quarter is noteworthy, it's the company's ability to meet strong demand for its products that is truly remarkable. Apple's Mac lineup has been particularly hard hit by supply chain issues, with both iPhone and iPad sales also facing constraints.

The company's strong sales figures for the iPhone and MacBook Pro and Neo models indicate that demand for Apple's products far exceeds expectations, putting considerable strain on the company's supply chain. Despite Cook's insistence that this issue is not a result of any supplier or partner limitations, it is clear that the supply chain simply cannot keep up with the demand for Apple's products.

Moreover, the cost of memory continues to rise, and Apple's ability to mitigate these costs by relying on existing inventory is diminishing as supplies become more limited.

When asked about price increases, Cook acknowledged that the company only raises prices "reluctantly" due to the "hundred-year flood on memory pricing." However, he took the opportunity to explain Apple's pricing philosophy, which considers revenue, margin, and units in determining how to handle these increases. Apple's services revenue did not see a year-over-year increase, with CFO Kevan Parekh blaming foreign exchange rates and other factors, but noted that the App Store still set a record for June quarter revenue.

Despite these mixed results, Apple continues to be an EGOT winner, excelling in every aspect of its business.