AAPL Q3'26 Conference Call Notes
Three things from Apple's call, starting with: Memory pricing is a 100-year flood and Apple just blinked first on pricing power
Three things that matter from Apple (AAPL) in its Q3’26 call:
Memory pricing is a 100-year flood and Apple just blinked first on pricing power: Cook admitted they ‘reluctantly raised prices’ on iPad and Mac due to ‘exponential increases in memory prices’, breaking Apple’s historical pricing discipline while memory costs will drive ‘increasing impact on our business’ beyond September.
Record $109B quarter masks serious supply chain inflexibility that’s capping upside: 22% iPhone growth constrained by advanced node availability with ‘limited flexibility in the supply chain to remedy it’, while Mac Mini and Studio need ‘several months to reach supply-demand balance’.
Siri AI launch timing in China/EU conspicuously vague despite ‘off the charts’ excitement: After WWDC fanfare, management offers only ‘we’re working through’ for China Siri AI and ‘hope to reach some sort of solution’ for EU, with zero timeline commitments.
Disclosure Quality: C+ | Financial Quality: C
Track AAPL’s promise history and grade trend: callsheetdaily.com/tickers/aapl
Delta Sheet
▼ Total Revenue: $111.2B (17% YoY) → $109.4B (16% YoY) (100 bps deceleration)
- iPhone Revenue: $57.0B (22% YoY) → $54.3B (22% YoY) (Flat growth rate despite constraints)
▲ Mac Revenue: $8.4B (6% YoY) → $10.8B (29% YoY) (+2300 bps acceleration)
▼ Services Revenue: $31.0B (16% YoY) → $30.7B (12% YoY) (400 bps deceleration)
▲ EPS: $2.01 (22% YoY) → $2.02 (29% YoY) (+700 bps acceleration)
▼ Gross Margin: 49.3% → 50.1% (48.1% ex-tariff) (120 bps decline ex-tariff)
▲ Operating Cash Flow: $28.7B → $34.4B (+$5.7B sequential)
▼ Services Gross Margin: 76.7% → 75.6% (110 bps compression)
▼ Products Gross Margin: 38.7% → 40.1% (37.5% ex-tariff) (120 bps decline ex-tariff)
▼ Q4 Revenue Guide: 14-17% YoY → 9-11% YoY (500-600 bps guide down)
▼ Memory Cost Impact: Significantly higher → Even higher for Sept (Escalating headwind)
▲ Paid Subscriptions: Not disclosed → ＞$1.5B (New milestone disclosure)
▼ Supply Constraints: iPhone, lesser Mac → Significant increase expected (Worsening bottleneck)
