Apple set for strongest June-quarter sales growth in 5 years
FILE PHOTO: Apple’s new entry-level Mac laptop, the MacBook Neo is on display during an event in New York City, U.S., March 4, 2026. REUTERS/Shannon Stapleton/File Photo
Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
July 29 : Apple’s decision to hold iPhone prices steady is set to power its strongest June-quarter sales growth in five years, but investors will want to know how long it can resist an increase.
The consumer electronics giant raised iPad and MacBook prices last month as it sought to offset cost increases from a shortage of memory and storage chips caused by massive AI datacenter buildouts.
But the company spared its cash cow, iPhones, even as rival smartphone makers were forced to pass on the higher costs that prompted a decline in global smartphone shipments in the April-June quarter, to the lowest in 13 years.
Apple’s decision paid off: iPhone shipments rose 3 per cent and the company’s market share climbed to nearly a fifth, estimated research firm Counterpoint.
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
This, and the fact that it has not spent hundreds of billions of dollars on data centers have helped it reclaim the title of the world’s most valuable company from Nvidia after two years as doubts about the AI boom grow.
Apple shares, up nearly 25 per cent so far this year, briefly pushed the company’s market value above $5 trillion for the first time on Tuesday, and have widely outperformed the rest of the stocks among the “Magnificent Seven”.
“Apple was initially scorned by many investors for not joining the AI investment cycle. Now, it is actually being rewarded as investors question the relationship between (Big Tech’s) spending and return on investment,” said Dan Morgan, portfolio manager at Synovus Trust, which owns Apple shares.
Last week, Alphabet stunned investors with a negative free cash flow for the first time in its history.
Morgan said he expects Apple to increase prices later this year, which could dampen demand and put pressure on a company whose high valuation does not leave “a lot of room for error.”
Analysts expect Apple to raise prices when it releases its next iPhone series, which typically happens in September.
Earlier this month, the company raised the price of Apple Music and Apple One, a subscription bundle for multiple Apple services.
IPHONE TO POWER STRONG REVENUE GROWTH
The company is expected to report that revenue rose 15.5 per cent to $108.65 billion in the April-June period, Apple’s fiscal third quarter, according to data compiled by LSEG.
That is slightly slower than the previous three months, but marks the strongest third-quarter sales growth since 2021.
Profit growth is also expected to slow slightly to 18.1 per cent as gross margin slips to 47.9 per cent from 49.3 per cent in the previous quarter.
Some analysts said the popularity of Apple’s devices and its strong ecosystem is likely to stave off any major demand hit for iPhones from price hikes, which could protect margins.
“Apple’s core product demand has been somewhat inelastic, with iPhone being the most inelastic product within Apple’s product ecosystem, followed by Mac and then iPad,” Morgan Stanley analysts said.
“This generally means that recent price increases are unlikely to materially disrupt demand, especially considering supply challenges at peers.”
IPhone sales likely increased 20.8 per cent in the period, also marking the strongest third-quarter growth since 2021.
Mac revenue growth is expected to improve to 8.7 per cent from 5.7 per cent in the previous quarter, despite the price increase, but iPad sales are expected to slow slightly to 5.2 per cent from 8 per cent in the second quarter.
Source: Reuters
Sign up for our newsletters
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
About The Author
