Apple’s iPhone and Mac businesses are generating record revenue, but worsening component constraints could limit shipments.
Apple reported its strongest June quarter on record, with revenue rising 16% year over year to $109.4 billion and earnings per share reaching $2.02. The biggest drivers were the iPhone and Mac businesses, which both posted record June-quarter sales.
iPhone revenue climbed nearly 22% to $54.25 billion, while Mac revenue jumped almost 29% to $10.35 billion. The gains exceeded Wall Street expectations and helped offset weaker iPad sales and slower growth in Apple’s services business.
Apple CEO Tim Cook said the company saw double-digit growth across iPhone, Mac and Services, as well as every geographic segment.
Supply constraints are getting worse
Despite the strong quarter, Apple warned that component shortages are becoming a bigger problem.
Cook said the company is facing “very significant” supply constraints, with limited flexibility in the supply chain, and that Apple is evaluating alternative memory suppliers. He also told Reuters that shortages of advanced chipmaking technology are limiting production of Apple silicon chips used in iPhones, Macs and other devices.
During the earnings call, Apple executives said the pressure is expected to increase in the current quarter, with higher memory costs affecting the iPhone, Mac and iPad product lines.
Apple has already raised prices on several Macs and iPads, including the MacBook Neo, as the industry-wide memory shortage pushes component costs higher. The company has not yet increased iPhone prices, though analysts expect that could change with the next iPhone launch.
Investors focus on the outlook
Apple expects revenue growth of 9% to 11% for the current quarter, below the roughly 12% growth analysts had been expecting, according to Reuters. The softer forecast sent Apple shares lower in after-hours trading as investors worried that supply problems could limit future sales even if demand remains strong.
The company also said its services business grew 12.1% to $30.74 billion, but that figure missed Wall Street estimates. Executives pointed to pressure from mobile gaming and changes to the App Store business model in some markets.
Looking ahead
Apple enters the second half of the year with strong momentum but less control over one of its biggest strengths: its supply chain.
The company continues to sell more iPhones and Macs than expected, yet shortages of advanced chips and memory have become the main obstacle to growth. That shift reflects a broader change across the tech industry, where AI infrastructure spending is competing with consumer electronics for the same critical components.
If supply improves, Apple could unlock demand that already exists. If it doesn’t, even record sales may not be enough to satisfy investors focused on future growth rather than past performance.
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