Key Takeaways
- Apple guided December-quarter gross margin to 45% to 46%, and Bloomberg’s Mark Gurman expects more hardware price increases across 2027.
- Mac revenue rose 24% in the September quarter despite June’s price increases.
- The $1,999 iPhone Duo carries much of the plan, and cracked screens are the main risk.
- Analysts expect fiscal 2027 revenue to grow about 10% and EPS about 6%, so price increases that stick leave room for estimates to rise.
Apple (AAPL) has a margin problem, and Bloomberg’s Mark Gurman thinks he knows how it’ll fix it: by charging more for its hardware.
On Nov. 2, Apple guided its December-quarter gross margin to 45% to 46%, as memory prices keep climbing. That’s down from 47.9% in the September quarter, which tariff refunds lifted by about a point. The guide overshadowed a record September quarter: revenue rose 12% to $114.5 billion.
On the Nov. 5 episode of Power On, Gurman said “it was really the gross margin forecasts in the mid 40% when investors really want to see them north of 50%.”
He noted that Apple called its June and September price increases only a partial offset. His own read: “my belief is you’re going to see more price increases tied to new hardware updates across 2027 and beyond.”
So if you were hoping Apple would wait out the memory bill, don’t hold your breath.
The Duo Does the Heavy Lifting
Gurman called Apple’s new foldable “this $2,000 to $3,000 device that’s going to be a huge revenue generator.”
Some of that demand lands next year. Within minutes of preorders opening on Oct. 16, new Duo orders showed late January delivery dates, after the December quarter ends. (Gurman says that’s part of why Apple’s 7% to 10% revenue growth guide looked soft.)
Analysts expect Apple’s revenue to rise from $479 billion in fiscal 2026 to $570 billion in fiscal 2028.
Apple Needs That Margin Back
Apple’s gross margin ranged from 46.5% to 50.1% over the last eight quarters, and tariff refunds supplied about 2 points of that June-quarter peak.
The December guide would put the margin below anything on that chart.
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Buyers Keep Paying, for Now
Apple raised MacBook prices by $100 to $300 in June, and Mac revenue still rose 24% to $10.8 billion in the September quarter. iPhone revenue climbed 17% to $57.6 billion, though the iPhone 18 Pro, $100 pricier, only arrived Sept. 18, eight days before the quarter ended.
But CFO Kevan Parekh said on the call that it’s “really early” to judge how buyers are responding.
The bigger risk is the Duo itself. Apple has acknowledged a screen issue on a small number of units. Patrick McGee, author of Apple in China, said on Prof G Markets that “in the best-case scenario, the problem of the iPhone Duo is an infant mortality problem,” meaning screens that break within days. Later failures, he said, can’t be ruled out yet.
A cracking flagship could cost Apple more than Duo sales. Services produced 42.2% of Apple’s fiscal 2025 gross profit on 26.2% of revenue, and they run on the devices people buy.
Analysts already allow for pain, expecting normalized EPS to rise from $8.98 in fiscal 2026 to $10.65 in fiscal 2028.
Fiscal 2027 is the small step, with EPS up about 6% against revenue up about 10%. With Apple’s share count shrinking, that implies a thinner net margin next year.
Apple’s Customers Will Foot the Bill
I expect Apple to keep raising hardware prices through 2027, and I think it’ll work. Buyers have already paid more, and with the Street braced for thinner margins, increases that stick leave room for EPS estimates to rise.
That still depends on the Duo’s screens holding up. Apple’s December-quarter report, due in late January, will show whether the margin landed in that 45% to 46% range and how much the Duo added to iPhone revenue.
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