Apple set two records this week, yet its stock closed lower than it opened. On Tuesday, it surpassed the $5 trillion mark, followed on Thursday by the best June quarter in the company's history – and then the decline began. Meanwhile, a second, less sensational story unfolded, one that is likely to become more important for investors next year.
This week was all about the numbers. On July 28, Apple became the first company to be valued at five trillion dollars and hit a record high of $342.89. Two days later, Tim Cook presented his final financial report as CEO, with record figures for revenue, earnings per share, and operating cash flow.
The stock market reacted nonetheless with a double-digit decline from Tuesday's high. The reason lies less in the figures themselves than in what lies beneath them: a one-off effect boosting profits, a services division underperforming, and a forecast predicting supply bottlenecks. Added to this was a calculation by Counterpoint showing just how much Apple's success in 2026 hinges on a single decision – not raising iPhone prices.
🔥 Story of the week: Record quarter without applause
Apple reported revenue of $109.4 billion for its third fiscal quarter, a 16.4 percent increase. Earnings per share rose 29 percent to $2.02, and the gross margin was 50.1 percent. Europe grew by 22.4 percent, matching the growth of Greater China and twice as fast as the United States.
A second look paints a more sobering picture. Around two percentage points of margin, amounting to $0.11 per share, came from customs refunds. Adjusted, this leaves a margin of 48.1 percent and $1.91 – the company's own forecast was 47.5 to 48.5 percent, while the analyst consensus was $1.89. The much-discussed "beat" is thus almost entirely a tax effect, and CFO Kevan Parekh confirmed upon inquiry that without it, the company would have landed at the midpoint of its own expectations.
| Division | Revenue Q3 2026 | Change from the previous year |
|---|---|---|
| iPhone | $54.25 billion | +21,7 % |
| Mac | $10.35 billion | +28,7 % |
| iPad | $6.19 billion | -5.9 % |
| Wearables, Home & Accessories | $7.88 billion | +6,5 % |
| Services | $30.74 billion | +12,1 % |
Another item appears in the balance sheet rather than the press release: Inventories rose from $5.72 billion to $11.09 billion, nearly doubling. Cook explained the jump, in response to inquiries, by citing advance purchases, the buffer of which expires after the September quarter. Apple is forecasting growth of nine to eleven percent for the current quarter – adjusted for a 2.5 percentage point currency effect, this translates to 11.5 to 13.5 percent operating growth. However, the company also warns of greater supply bottlenecks than in previous quarters.
For Cook, this was his last conference call as CEO before John Ternus takes over on September 1st. All the details from the call with analysts are available in the conference call recap, and the original figures can be found in the announcement in the Apple Newsroom.
📰 What Else Mattered
AppleCare One has launched in Germany. This group plan covers multiple devices in a single subscription and is therefore available in Germany for the first time. Pricing, scope, and limitations of the model are summarized below for the German launch.
iOS 26.6 is final. The update, released as a maintenance release, rebuilds the Spotlight index, thus preparing the search functionality for iOS 27. More important than the new features themselves is the security patch: Apple closes 78 vulnerabilities on iPhone and iPad.
Three smart home devices are nearing launch. Apple TV and HomePod mini are slated for autumn, while the smart home hub is an exception, expected between October and early 2027. The latest information on the display device can be found in the HomePod overview.
The touchscreen is coming to the Mac. Samsung is set to be the exclusive supplier of the OLED panel for the MacBook Ultra – a single supplier for a component that is revolutionizing a product line spanning decades. All current information about the device can be found in the MacBook Ultra overview.
Qualcomm is losing its iPhone business faster than planned. The modem exit is happening earlier than its own forecasts predicted, as the supplier's quarterly figures show.
Two regulatory fronts opened simultaneously. In London, Apple is fighting the competition authority's restrictions, while in Washington, the Justice Department is seeking to overturn Apple's access to government records.
💡 Rumor of the week: Up to $300 price increase for the iPhone 18 Pro
The expected price range for the upcoming Pro generation has risen again. Instead of the $200 increase mentioned in June, a surcharge of $250 to $300 is now being discussed, which would mean $1,349 to $1,399 for the iPhone 18 Pro and $1,449 to $1,499 for the Pro Max.
Extrapolating to German prices – based on the current MSRPs of €1,299 and €1,449 – the expected cost would be around €1,590 to €1,650 and €1,750 to €1,810, respectively. This would be the most significant price movement for an iPhone generation in years. The complete information on the device can be found in the iPhone 18 Pro rumor overview.
📊 Number of the week: 49 percent
This is how large Apple's share of global smartphone sales was in the second calendar quarter, according to Counterpoint – with a unit share of 21 percent. The average selling price rose from $879 to $946.
Comparing the figures, the average price for all other manufacturers combined is around $260. Apple sells one in five devices and thus takes almost half the profit. A key reason for this is that while Android prices rose, Apple prices remained stable – the company's internal decision-making process regarding price increases became a topic of discussion that same week.
👎 Flop of the week: Services fail to meet expectations
$30.74 billion and 12.1 percent growth sound solid, but fell short of market expectations. The reasons range from advertising revenue to the opening of app stores, and Morgan Stanley considers a decline to 9.5 percent possible for the September quarter – the first time since the June quarter of 2023 that growth will start with a nine.
This impacts the division that drives Apple's valuation, with a gross margin of 75.6 percent. The only new revenue driver visible this week is additional AI quotas via iCloud+ – an add-on offering, not a substitute for double-digit growth.
🔭 What's Coming Next Week
The leadership change is drawing near: John Ternus will take over on September 1st, and his career path and position within the company are likely to shape its direction for the coming years. Further public appearances and initial policy decisions are expected before then.
The iOS 27 cycle continues, and some anticipated features are still missing from the beta. Streaming services kick off the new month with a full lineup – Apple TV highlights in August range from ongoing series seasons to new titles.
💬 My Take
Apple's pricing discipline was its real competitive advantage in 2026. While competitors passed on increased storage and manufacturing costs to customers, Apple maintained its existing iPhone prices – thereby securing a revenue share that no market share in terms of units sold could explain. The difference of $946 to approximately $260 average price is the result of this decision.
This very discipline is now coming to an end. Memory costs have already accounted for more than the entire margin change in the quarterly accounts, more suppliers in the DRAM market will not bring any short-term relief, and the expected premium for the upcoming Pro generation is higher than all estimates from the spring. Even Cook's own description of the pricing process this week sounded less like restraint and more like preparation.
Anyone buying a new iPhone in 2027 will be retroactively paying for the market share of 2026. This is understandable from a business perspective, but still bad news for buyers – especially in Europe, where the weaker exchange rate adds to the negative impact of every dollar increase.
📚 From Our Archive
- Tim Cook: Biography, career & his time as Apple CEO – after the last earnings conference of his tenure, it is worth taking a look at the 15 years that led to this record quarter.
- iCloud Costs: All storage plans, prices and which one is worthwhile – anyone considering the new AI quotas should first know what their current plan costs and offers.
It was a week in which Apple did everything right on paper, yet the market remained suspicious – because the more interesting figures this time were not in the press release, but in the balance sheet and the forecast.
Until next Sunday, Apfelpatient wishes you relaxing reading and a good start to the week. (Image: mrchv / DepositPhotos.com)
