Apple faces pressure on iPhone profits as supplier doubts grow

Apple said its last gross margin benefited from tariff refunds.

What is Apple actually reporting?

macdailynews.com reported on Oct. 7 that Apple will report FY26 Q4 earnings on Monday, November 2, 2026 after market close, right around 1:30 p.m., and that the conference call is scheduled for 2:00 p.m. It also said Apple’s official guidance emphasized expected revenue growth for the Q426 quarter of 9% to 11% from a year earlier, with Q4 2025 revenue of $102.5 billion implying roughly $111.7 billion to $113.7 billion, gross margin in the 47–48% range and iPhone revenue growth in the mid-teens while supply constraints hit iPhone, Mac and iPad. The same report said the September quarter ran from June 28th through September 26th and will include the first nine days of sales for the iPhone 18 Pro and iPhone 18 Pro Max, while the iPhone Duo goes into the December quarter instead. macobserver.com reported the same day that Apple lists the event through its Investor Relations portal and that the call will be the first quarterly results presentation led by John Ternus since he succeeded Tim Cook as Apple CEO on September 1. A 247wallst.com preview, by contrast, wrote on Oct. 12 of heading into October 29; the investor-relations schedule is the better anchor.

That makes the release a test of quality as much as size. The new Pro models barely touch the reported period, and the Duo is outside it, so any beat or miss in total net sales cannot be read as a clean verdict on the full new-phone cycle.

What does the margin hide?

Apple's latest release explains why the margin question is not a footnote. Revenue was still expanding, but company gross margin and per-share earnings included tariff refunds, a benefit that says little about durable demand.

The SEC filing published on July 17 supplies the primary-source fact that preview coverage can miss: products gross margin and gross margin percentage rose because of product mix and tariff refunds, while higher costs, including memory, partly offset those gains. The same filing says the Company was experiencing supply constraints and increasing component costs driven by industry supply-demand imbalances, including advanced semiconductors, NAND and DRAM.

TrendForce said on Sept. 30 that memory and storage contract prices are expected to rise. It also said rising mobile memory costs and the depletion of low-cost inventories continue to weigh on smartphone production, suppressing demand for memory.

That puts the guided margin range in a different light. A lower gross-margin guide after a refund-aided quarter may be normal conservatism, but the filing and memory-price forecast make the cost side harder to dismiss as noise.

What would change the read?

Fortune reported on Oct. 10 that Apple had told some suppliers to cut production of components for its new Pro phones, citing a Nikkei Asia report that raised questions about premium-phone demand as memory-chip costs soar. The reported cuts concern component orders, not confirmed reductions in finished phones. Apple has not confirmed them.

AppleInsider wrote on Oct. 9 that whole-unit assembly orders for the new Pro phone had not been cut. It said Apple calibrates the parts it needs to keep on hand every year, sometimes more than once. That is the cleanest rival reading: a parts adjustment can be routine even when a supplier hears a cut.

MacRumors reported on Oct. 13 that Apple's share of worldwide smartphone shipments rose to a third-quarter record, despite a decline in its own shipments, according to preliminary figures from Counterpoint Research. Manufacturers across the industry shipped fewer phones than a year earlier. MacRumors also cited IDC as saying that Apple's newly released phones exceeded sales expectations, although the smaller selection of new models reduced its overall shipments.

Fortune reported that Apple had told some suppliers to cut components for its premium iPhones. MacRumors reported preliminary figures showing that Apple gained smartphone market share even as its own shipments fell and the wider market contracted. That does not settle what the supplier cuts mean. Apple could gain share in a shrinking market and still face pressure on profit margins if costs rise faster than prices.

Apple equity therefore carries a two-part exposure. If the revenue print clears the upper bound, pressure should move from demand toward gross-margin durability because refund support and memory costs become the harder proof. If it does not, the supplier report becomes harder to dismiss because guidance already set a high growth bar.

The public observable is simple: total net sales in Apple’s own results release. The company can settle the demand question with one line, but it still has to show whether that line was earned with a margin investors can carry into the holiday quarter.

Ternus inherits a clean but narrow setup: Apple may be gaining share in a shrinking phone market, yet the next dollar of iPhone revenue still has to prove it is not arriving with a thinner margin.