New CEO's first earnings call

John Ternus, 51, spent his first two months as Apple CEO celebrating new products, especially the foldable iPhone Duo. On Monday he faced Wall Street for his first quarterly earnings call.

Stock falls despite beating earnings

Apple beat September-quarter earnings expectations, but investors traded the stock down in after-hours trading due to concerns about margin pressure and slowing Services growth.

Memory chip shortage squeezes margins

Ternus told analysts that memory chip pricing is unprecedented and has put pressure on Apple's prices. He expects pricing for memory purchases to continue increasing beyond the December quarter.

“What we're seeing with memory pricing right now is unprecedented. That has put pressure on our prices.”

Gross margin expected to decline

Apple said it expects gross margin for its December quarter to be between forty-five and forty-six percent, down from forty-seven point nine percent in September, reflecting memory costs and Siri AI expenses.

Investor skepticism on AI strategy

Ternus offered few details about Siri AI's roadmap when asked by analysts. He noted Siri is primarily request-based today but built on architecture to expand capabilities over time.

Siri lags behind competitors

Reviews of the revamped Siri have been mixed. The assistant has lagged well behind leading chatbots from OpenAI and Anthropic, and personalized agents from Meta and others.

iPhone Duo faces supply constraints

The iPhone Duo showed strong demand at Ternus's first public event as CEO in early September, but supply constraints have made it difficult to gauge sales scale. New orders won't arrive until end of January.

Services growth slows without clear answer

When asked about Services slowdown, Ternus and executives mostly spoke about Apple's active installed base surpassing two point five billion devices as a future monetization possibility.

China sales miss targets

Sales in Greater China jumped twenty-one percent year-over-year in the September quarter, but fell one billion dollars short of Wall Street targets.

Ternus projects confidence despite headwinds

Despite margin pressure, Services slowdown and AI skepticism, Ternus told analysts he has no doubt Apple will be extraordinarily successful with its team, vision, mission and values.

“We have everything we need to be extraordinarily successful. With this team, this vision, this mission, and these values, I have no doubt that we will.”