John Ternus, who took over as Apple's CEO from Tim Cook in September, will host his first earnings call on Monday as the company reports results for its July-September fiscal fourth quarter. According to reports from Reuters, Ternus has overseen the introduction of Apple's first foldable phone, smart home hub and Apple's first touch-screen laptops, all of which began shipping during the current fiscal first quarter. The new iPhone Duo, priced at $1,999 in the US, launched on October 23 and has already sold out online within minutes, though some buyers have reported cracks and lines along the inner display's central fold. As reported by Reuters, the company will face scrutiny over three key issues: its crucial holiday-quarter outlook, Ternus's remarks on AI and the revamped Siri, and rising memory-chip costs that analysts expect to drag quarterly profit growth to its weakest in six quarters.
Analysts expect Apple to report a nearly 11% rise in revenue to $113.39 billion for the July-September period, as reported by LSEG data. Net profit is projected to rise about 6% to $29.04 billion, with Apple's services business expected to grow almost 10% to $31.56 billion, marking its slowest pace in more than three years. iPhone sales are projected to climb about 15% to $56.54 billion, slowing from growth of about 22% in the previous three months. The results will capture just nine days of sales of the new iPhone 18 Pro models, while the iPhone Duo will benefit the holiday quarter. According to Reuters, the test will be how quickly Apple can replace affected devices while supplies remain tight.
Apple faces scrutiny over rising memory-chip costs that analysts expect to drag quarterly profit growth to its weakest in six quarters. As reported by Reuters, Cook had previously called the memory cost increases a '100-year flood' during the company's current fiscal first quarter. The company has been trying to position its AI offerings differently than rivals such as Meta Platforms' Muse agent, which took App Store rankings by storm in recent weeks, while also suing OpenAI over alleged trade-secret theft. Rivals such as OpenAI, which Apple is suing over alleged trade-secret theft, are also developing devices aimed at displacing the iPhone as the central device in people's lives.
Apple is marketing its AI systems toward 'everyday people' rather than Silicon Valley insiders, who are big users of frontier AI models from companies like OpenAI. According to Reuters, Dan Morgan, portfolio manager at Synovus Trust, noted that investors want to know whether Apple could profit by distributing third-party AI agents through its App Store and taking a cut of the business they generate. Morgan added that investors want to know whether Apple could profit by distributing third-party AI agents through its App Store and taking a cut of the business they generate. For now, Apple's reluctance to join the massive AI spending race has worked in its favor. Its shares have risen about 27% this year, outperforming tech giants such as Microsoft, Alphabet, Meta and Amazon as investors seek shelter from mounting concerns over the cost of building AI infrastructure.
The iPhone Duo's online orders sold out within minutes, but some buyers have reported cracks and lines along the inner display's central fold, prompting Apple to offer replacements. As reported by Reuters, IDC analyst Nabila Popal expects demand for the Duo to continue exceeding supply despite the screen problems. Bank of America estimates Duo buyers face average delivery waits of 79 days, with shipments stretching into January. The company's forecast for the crucial holiday quarter will be closely watched to determine whether its blitz of new products can help offset rising costs. Apple's reluctance to join the massive AI spending race has worked in its favor, with its shares rising about 27% this year and outperforming tech giants as investors seek shelter from mounting AI infrastructure costs.
