Key facts
- Apple's June-quarter sales growth is anticipated to be its strongest in five years.
- The company held iPhone prices steady while increasing prices for iPads and MacBooks.
- iPhone shipments increased by 3%, boosting Apple's market share.
- Revenue is projected to reach $108.65 billion, a 15.5% increase.
- iPhone sales are expected to have grown by 20.8%.
Apple is poised to achieve its strongest June-quarter sales growth in five years, driven by its decision to maintain iPhone prices while rivals have passed on higher costs. This strategy has helped Apple reclaim the title of the world's most valuable company from Nvidia, as investors begin to question the return on investment from massive AI datacenter spending by other tech giants.
Despite cost increases affecting memory and storage chips, Apple spared its core product, the iPhone, from price hikes. This decision contributed to a 3% rise in iPhone shipments and a market share gain to nearly one-fifth, according to Counterpoint. The company's shares have risen nearly 25% this year, briefly pushing its market value above $5 trillion.
Analysts anticipate Apple will increase prices with the release of its next iPhone series in September. The company is expected to report revenue growth of 15.5% to $108.65 billion for its fiscal third quarter, marking the strongest third-quarter sales growth since 2021. Profit growth is projected to slow slightly to 18.1%, with gross margin slipping to 47.9%.
Some analysts believe Apple's strong ecosystem and product popularity will mitigate significant demand drops from future price increases. Morgan Stanley analysts noted that Apple's core products, particularly the iPhone, exhibit inelastic demand, suggesting that recent price hikes are unlikely to materially disrupt sales, especially given supply challenges faced by competitors. iPhone sales are expected to have grown by 20.8% in the quarter, with Mac revenue growth improving and iPad sales slowing slightly.