Apple Shares Fall on Weak Gross Margin Forecast
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What happened
Apple on Monday reported better-than-expected quarterly results, with $114.8 billion in revenue versus estimates of about $113.9 billion and iPhone revenue of $57.58 billion that also topped forecasts; iPad, wearables, and services sales missed estimates. It was the first earnings report under CEO John Ternus, who succeeded Tim Cook on September 1. CFO Kevan Parekh forecast December-quarter gross margin of 45% to 46%, below the 46.3% average analyst estimate, citing primarily higher memory costs and some costs related to the ramp of Siri AI, and Apple shares fell in Tuesday morning trading by amounts reported between about 1.6% and 3%. Ternus called memory pricing “unprecedented” and said purchases would keep getting more expensive beyond December; the company also warned of holiday-quarter supply constraints on iPhones and Macs driven primarily by memory, while COO Sabih Khan said purchase obligations rose by $33 billion from the June quarter to the September period. September-quarter gross margin was 47.9%, including a 1-percentage-point boost from tariff refunds, after 50.1% in the June period.
Sourcing check · Fully on the record · 2 articles
2 of 2 articles cite a named source for the story. It was on the record from the first report.
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- Primary evidence · cites a document or data 1 of 2
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- How it developed
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This is about who is cited, not whether the story is true. Each source below says what it names. How we count
Omitted — what each side leaves out
Unpacked
Apple's own forecast named two pressures on holiday gross margin, not one. Left-leaning coverage reports the finance chief citing higher memory costs and the Siri AI ramp together. Right-leaning coverage sticks to rising memory and chip costs from AI demand and never mentions Siri. A reader of right-leaning coverage would think the entire miss is other firms hoarding memory, not Apple spending on its assistant. The company called memory the primary hit, but it still put both on the record.
Left-leaning coverage leads with a memory crisis interrupting an otherwise strong report. Right-leaning coverage leads with a new chief who disappointed analysts on a "ho-hum" call. One version is a cost shock after good results. The other is a shaky first appearance.
How much of the holiday margin guide is memory inflation versus the Siri ramp?
Bottom line
If you only read the New York Post, Apple's weak holiday margin is a memory-chip story. CNBC is the one that reported Siri's ramp as part of the same forecast.
The receipts — 2 facts one side's coverage lacks
- Purchase obligations rose by $33 billion from the June quarter to the September period
- Apple expects holiday-quarter supply constraints on iPhones and Macs, primarily from memory
The Left View
CNBC frames the episode as Ternus’s “first big test,” casting the margin miss as part of an industry-wide memory shortage that Cook had called a “hundred-year flood,” with Apple raising iPhone prices $100 “reluctantly” and absorbing costs as AI buyers crowd out smartphone and PC makers. The outlet notes a possible third straight margin decline to the lowest since fiscal Q4 2023, but stresses that Apple still beat on core results, that margins remain far above the 38–39% range earlier in the Cook era as services grew, and that Apple’s ability to eat costs may let it take share from Windows PC and Android rivals—citing Ternus on IDC share gains and a record Mac year. It also highlights operational pushback: Khan, the first COO on an Apple earnings call since 2010, described “less flexibility in the supply chain than normal” and the jump in purchase obligations.
The Right View
NY Post coverage frames Ternus as disappointing Wall Street on a “ho-hum” inaugural call, saying he largely stuck to scripted comments, skirted questions on competing with AI rivals such as Meta’s Muse, was vague on iPhone Duo supply, and—per one X user—“absolutely dodged the question entirely” on not releasing a standard iPhone 18, while delegating many questions to Parekh and Khan. The papers say the below-estimate holiday margin guide “spook[ed] investors” as a sign Apple is bracing for a growth slowdown, quoting Quilter Cheviot’s Ben Barringer that once tariff benefits “roll off, the margin will get hit.” They also emphasize Apple’s premium valuation (shares up about 22% this year versus peers such as Amazon and Microsoft), which leaves “little room for error,” plus product-specific worries around the nearly $2,000 iPhone Duo’s cracked and glitching screens and the misses outside the iPhone.
Our Take (balanced)
The left’s strongest argument is that this is an industry-wide memory shock—Cook’s “hundred-year flood”—that Apple can absorb better than smaller rivals, with the beat on revenue and iPhones, Ternus’s IDC share-gain claim and record Mac year, and still-elevated margins versus the earlier Cook era as evidence. The right’s strongest argument is that investors reacted to a below-consensus holiday margin guide plus a first CEO appearance that sounded scripted and evasive on AI competition and product supply, against a rich multiple that prices in little slippage, with Barringer’s warning that tariff benefits will fade and the non-iPhone misses as supporting evidence. The central unresolved tension is whether Tuesday’s decline prices a transitory cost squeeze Apple can outlast and convert into share gains, or a genuine check on growth and leadership credibility under Ternus.
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