Apple (AAPL.O) reported fiscal Q4 2026 results (quarter ended September 2026) after the U.S. market close on the morning of November 3, 2026, Beijing time. Key takeaways:

1. Overall performance: Apple booked $114.48 billion in revenue this quarter, up 11.7% year over year, beating the $113.5 billion consensus and topping the high end of the company's own guidance (9–11% growth).

Top-line growth was driven mainly by iPhone and Mac. The iPhone 18 Pro series, launched late in the quarter, began contributing revenue in mid-September; Services grew 9.8% year over year, roughly in line with expectations.

Gross margin came in at 47.9%, down 2.2 percentage points quarter over quarter but slightly ahead of the 47.6% consensus. That figure still includes roughly 1 percentage point of tariff refunds; excluding them, gross margin was about 46.9%.

Services gross margin was 76.0%, up 0.4 percentage point quarter over quarter. Hardware gross margin was 37.2%, or about 36% excluding tariff refunds, down roughly 1 percentage point quarter over quarter, mainly on rising memory prices.

Per management's breakdown, after stripping out tariff refunds in the June and September quarters, both total and hardware gross margins fell about 1 percentage point quarter over quarter, almost entirely because of memory. The actual memory cost impact was larger, but was partly offset by consumption of lower-priced inventory, cost reductions in non-memory components, and product price increases. As of this quarter, the company had recovered the vast majority of tariff refunds paid; that tailwind will not recur in subsequent quarters.

2. iPhone: iPhone revenue was $57.58 billion this quarter, up 17.5% year over year, ahead of the $56.5 billion consensus. Despite supply constraints and currency headwinds, growth came mainly from higher average selling prices following the iPhone 18 Pro price increase, plus continued demand for the iPhone 17 series; both the U.S. and Greater China posted strong double-digit growth.

Dolphin takes a closer look at the volume-price dynamic: iPhone growth this quarter came mainly from higher average selling prices.

1) iPhone shipments: Per IDC, global smartphone shipments in Q3 2026 were about 255 million units, down 21% year over year. Apple shipped about 57.3 million units globally this quarter, down 2% year over year, with share rising from 18.2% a year earlier to 22.4%—clearly outpacing the overall market.

Rising memory prices pushed Android brands to raise prices one after another, and Apple likewise raised Pro series prices by $100 this cycle. Judging by delivery lead times, demand has held up solidly post-increase; by late October, iPhone 18 Pro/Pro Max lead times had caught up with the same period last year.

2) iPhone ASP: Based on iPhone revenue and shipments, the average selling price this quarter was about $1,005, up roughly 20% year over year (about $837 in the same period last year).

Apple's pricing moves this time centered on raising the starting prices of the 18 Pro/Pro Max by $100 each and lifting the price of the older iPhone 17 by $100 as well, while releasing no base model this autumn—skewing the mix toward Pro.

3. Hardware beyond iPhone: Mac revenue was $10.79 billion this quarter, up 23.7% year over year, well above the $9.7 billion consensus. Mac continued to benefit from strong sales of MacBook Neo and MacBook Pro, growing more than 20% despite supply constraints (unit volume -13% year over year, price +42% year over year).

iPad revenue was $6.23 billion, down 10.4% year over year; Wearables and other hardware revenue was $8.3 billion, down 7.9% year over year—both below consensus ($6.8 billion and $9.0 billion).

iPad was hurt by supply constraints and a tough year-ago comparison; Wearables faced a high base from last year's Watch SE3 and AirPods Pro 3 launches, while the new Watch S12/Ultra 4 and AirPods 5 only launched in mid-September and contributed little this quarter.

4. Services: Services revenue reached $31.57 billion this quarter, in line with the $31.6 billion consensus, up 9.8% year over year. With a 76.0% gross margin, Services accounted for 27.6% of revenue but generated 43.7% of gross profit.

By segment, video, cloud services, payments and advertising all hit record highs, and music set a September-quarter record; App Store performance was similar to the same period last year, with mobile gaming still a drag. FX was the main reason for slower Services growth: from the March quarter to the September quarter, about 4 percentage points of the decline in year-over-year Services growth came from currency. The EU App Store fee cut (from 30% to 26%) took effect on October 1, with the impact mainly in the next quarter.

5. Revenue by region: The Americas remained the company's base, with revenue of $48.68 billion, accounting for 42.5%, up 10.2% year over year; Europe revenue was $32.01 billion, up 11.5% year over year; Greater China revenue was $17.54 billion, up 21.0% year over year, still the fastest-growing region; Japan fell 1.4% year over year, and the rest of Asia-Pacific grew 15.0% year over year.

iPhone shipments in the Chinese market this quarter were about 10.33 million units, down 4% year over year, while the overall Chinese smartphone market fell 15% year over year; rising memory prices squeezed low-end Android, and iPhone's market share rose 2 percentage points year over year.

Dolphin's overall view: Revenue "passed steadily," but profit was eaten by memory

Apple's report card this quarter was good, with revenue even above the company's own highest guidance. However, gross margin still includes tariff refunds; excluding that factor, pressure from rising memory prices has begun to show.

Revenue growth came almost entirely from selling iPhones and Macs at higher prices rather than selling more units; volumes actually declined slightly. This year the Pro series raised prices directly, and no base model was released in the autumn, so what sold was naturally skewed toward the expensive models.

Profit was not so easy. Memory prices soared, and almost all of the extra cost of the new Pro Max went to memory; management itself called the increase "unprecedented." This quarter was supported by cheap old inventory and price increases, but inventory is being used up and procurement prices are still rising. Fortunately, Apple already sells in the mid-to-high end and has already raised prices, making it more resilient than competitors.

Beyond this quarter's data, management also provided guidance for the next quarter: the company expects December-quarter revenue to grow 7–10% year over year, corresponding to about $153.8–158.1 billion, slightly above the market expectation of $152.6 billion; software services are expected to grow 8–9% year over year (about $32.4–32.7 billion), below the market expectation (+12% year over year), mainly dragged down by a quarter-over-quarter weakening in third-party licensing revenue (mainly Google's payment to Apple for the default search engine) and FX headwinds.

Services revenue growth has entered the high-single-digit range. Third-party licensing mainly comes from "rent" paid by Google and others for Apple's default search position; it cannot be ruled out that a slowdown in Google's traditional search revenue also affected the revenue share paid to Apple.

The company expects next quarter's gross margin to be 45–46%, below the market expectation of 46.7%, with the midpoint about 1.4 percentage points lower than this quarter's 46.9% excluding tariff refunds, mainly due to higher memory costs and cloud costs related to Siri AI.

Based on guidance, Dolphin estimates December-quarter operating profit at about $50 billion, possibly even below the same period last year ($50.9 billion). In other words, "revenue grew at a high-single-digit rate, but profit declined," with the extra revenue basically eaten by memory costs.

Management said supply constraints in the September quarter mainly came from advanced processes, which are easing as more products shift to the 2nm node; the main constraint in the December quarter will shift to memory.

To improve supply, the company's manufacturing purchase commitments increased by $33 billion from the June quarter to the September quarter, and ending inventory also rose from $11.1 billion at the end of last quarter to $14.5 billion ($5.7 billion in the same period last year), clearly signaling an intent to lock in materials in advance.

Beyond Apple's earnings report, the market is also focused on the following aspects:

a) China market: share defended, but total volume declined

Greater China revenue grew 21% year over year this quarter, mainly driven by iPhone and Mac. By shipments, China's phone market was clearly hit by rising memory prices: Q3 2026 China smartphone shipments were about 58.06 million units, down 15% year over year; iPhone shipments were about 10.33 million units, down 4% year over year, with share around 18%, still outperforming the overall market.

b) iPhone 18 cycle: demand "resilience" after the price increase

At the September 9 launch event, Apple unveiled the iPhone 18 Pro/Pro Max (starting at $1,199/$1,299, each up $100), its first foldable iPhone Duo (starting at $1,999), the self-developed A20 Pro chip and C2 modem, with the base model delayed to next spring. High-frequency data show demand is "not bad but not strong": global Pro/Pro Max delivery lead times in week 7 were 7/21 days respectively, exactly flat with the same period last year; Duo delivery lead time was about 94 days, with in-store pickup unavailable in all regions, clearly indicating demand exceeds supply.

There has also been negative news recently (Nikkei): Pro component orders were cut in October; Largan said the customer cut orders shortly after launch, down 15–20% from the original plan. On the earnings call, management said iPhone had just raised prices and it was "too early" to assess price elasticity; regarding why no base model was released in the autumn, management did not respond directly, saying only that iPhone 17, iPhone Air and iPhone 17e would form the holiday-season product lineup together with the 18 Pro series.

c) AI strategy: Siri upgrade launched, but absent in China and Europe

The new Siri (Siri AI) promised at WWDC was launched in September in beta for U.S. English users and expanded in October to French, Japanese, Korean, Portuguese and Spanish, but the initial launch does not cover the EU or China.

Features relying on server-side models (such as Siri AI and smart photo editing) will have usage caps, and users needing more quota can pay to expand it in the future, opening a path for AI monetization through subscriptions such as iCloud+. Management disclosed that Siri receives more than 2.5 billion requests per day and is currently still mainly "request-based" interaction, but the underlying architecture is based on a scalable orchestration framework and will gradually expand agent capabilities later.

In China, "Apple Intelligence" passed generative AI service filing in July, and the company partnered with Alibaba to provide local model capabilities. On the cost side, management for the first time clarified the financial impact of Siri AI: cloud costs for server-side inference are included in cost of services, and Siri AI bundled in hardware sales will defer part of revenue; both will weigh on gross margin, which is also one of the reasons for the weaker gross margin guidance for the December quarter.

On capital expenditure, Apple remains restrained, with capex of about $2.2 billion this quarter (-31% year over year), in sharp contrast with other major players' quarterly investments that often run into tens of billions of dollars.

Last quarter was a quarter of "slightly better results, weaker guidance": the September-quarter revenue guidance given at the time (+9-11%) was below consensus (+12%), services missed expectations twice in a row, and the stock fell 7.5% the next day.

After that, the pricing at the iPhone 18 launch event (9/9) did not have much impact, delivery times were flat versus last year, and the stock recovered and approached a new high around $348 in late October; however, recent market reports of supply chain order cuts, falling delivery times, and weaker carrier upgrade rates have begun to raise concerns about the December quarter.

Last quarter, Dolphin Research noted that Apple had already established itself as a "safe haven" amid the broader AI selloff, with its valuation climbing from 29x PE to above 35x PE. Even as the market expects the company's growth to slow—citing storage pressure and demand concerns—Apple's valuation has risen, not fallen, over the past three months.

Dolphin Research views this quarter's earnings report and next quarter's revenue guidance as having "passed steadily"—slightly better than expected—confirming that the "price increases for growth" thesis holds on the revenue side. The trouble lies on the profit side: the 45–46% gross margin guidance came in below consensus, with storage cost increases and Siri AI cloud costs eating into the revenue elasticity that price increases bring. On top of that, services growth guidance was cut to 8–9%, also short of market expectations.

With the stock still trading at 36x PE for fiscal 2027, the market is paying a "certainty premium" for Apple—yet this guidance delivers a message of "revenue is fine, profit is uncertain." Looking ahead, key items to track are: ① hardware gross margin once low-priced inventory is depleted; ② the ramp-up pace of iPhone Duo; ③ whether paid monetization of Siri AI can stabilize services growth.

Dolphin Research judges that this earnings report cannot drive valuation further upward, and the stock is more likely to enter a valuation digestion period—"stable but lacking upward momentum."

Still, this earnings report is not enough for the market to change its positioning of Apple as a hedge against AI trades. After all, among the major players, only Apple and Nvidia are still maintaining decent positive cash flow.

Dolphin Research's detailed data and charts on Apple's earnings report:

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