John Ternus will lead his first Apple earnings call as CEO on Monday, two months after taking over from Tim Cook. Investors are expected to examine the company’s forecasts to assess whether a wave of new products can help offset higher memory-chip costs.
During Ternus’s first period in charge, Apple launched its first foldable phone, a smart-home hub and its first laptops with touchscreens. The products began reaching customers in the company’s first fiscal quarter, as Apple dealt with what Cook described as a “once-in-a-century deluge” of rising memory costs.
The results are likely to draw scrutiny on three fronts: Apple’s outlook for the crucial holiday quarter, Ternus’s comments on artificial intelligence and a redesigned Siri, and the impact of more expensive memory chips. Analysts expect the higher component costs to contribute to the weakest quarterly earnings growth in six quarters.
Apple has sought to distinguish its artificial-intelligence offerings from rivals, including Meta Platforms’ agent Muse, which has recently topped App Store rankings. OpenAI, which Apple is suing over alleged trade-secret theft, is also developing devices intended to challenge the iPhone’s role as the central device in consumers’ lives.
The company’s approach to AI could also affect the future of its services business, whose slower growth has concerned investors after years of rapid expansion. Dan Morgan, a portfolio manager at Synovus Trust, said investors would want to know whether Apple could generate revenue by distributing third-party AI agents through the App Store and taking a percentage of the transactions they generate.
For now, Apple’s reluctance to join the race for massive AI infrastructure investments has supported its shares. The stock has risen about 27% this year, outperforming Microsoft, Alphabet, Meta and Amazon as investors seek protection from growing concerns over the cost of building AI infrastructure.
Analysts expect Apple to report nearly 11% revenue growth to $113.39 billion for the July-to-September period, its fiscal fourth quarter, according to LSEG data. Net income is forecast to rise about 6% to $29.04 billion.
The services segment is expected to grow almost 10% to $31.56 billion, its slowest pace in more than three years. iPhone sales are projected to increase about 15% to $56.54 billion, down from approximately 22% growth in the previous three months.
The results will include only nine days of sales for the new iPhone 18 Pro models. The iPhone Duo, Apple’s first foldable device, went on sale on October 23 and is expected to have a greater impact on the holiday quarter.
Investors will closely examine comments on the Duo’s sales after some buyers reported cracks and lines along the central fold of its internal display. Apple has offered replacements. Online orders sold out within minutes, and the device starts at $1,999 in the United States.
IDC analyst Nabila Popal expects demand for the Duo to continue exceeding supply despite the screen problems. She said the key test would be how quickly Apple can replace affected devices while inventory remains limited. Bank of America estimates that buyers face an average delivery wait of 79 days, with shipments extending into January.
Sources: CNN Brasil.