Apple Slides After Chip Shortage Hits Sales Forecast, Posing Early Test for Incoming CEO Ternus

Apple Stumbles as Supply Crunch Bites: Weak Forecast, CEO Handover and Regulatory Headwinds

Apple shares fell 6% in after-hours trading after the company warned that component shortages and rising memory costs would dampen sales growth in the current quarter. The outlook overshadowed strong iPhone and Mac revenue in the fiscal third quarter and came just weeks before Tim Cook hands over to hardware chief John Ternus on September 1.

Cook likened the memory cost spike to a “100-year flood” and said chip shortages were fuelled by higher-than-expected demand for the iPhone 17 line and the new MacBook Neo. As a result, the company expects revenue to rise only 9% to 11% in the September quarter, missing analyst forecasts of more than 12% growth. Extended wait times on the Mac mini and Mac Studio and price hikes on Macs and iPads in June underscore the severity of the squeeze.

Beyond hardware, Apple said services growth would decelerate and flagged an impact from new EU rules that let developers collect subscription payments directly, bypassing the App Store. The warning came as China sales missed estimates and services revenue disappointed, with the App Store and gaming showing softness. The mix of supply-side pain, regulatory headwinds and slowing services growth creates a demanding handover for Ternus, who will also need to close the AI gap with rivals.

Why the Supply Snags, Services Slowdown and Succession Are Flashing Red for Investors

Chip Shortages and Memory Costs: A ‘100-Year Flood’ Hits the Bottom Line

The shortages are not just a blip. Apple’s inability to secure enough processors forced it to raise prices on Macs and iPads in June, yet the sales forecast shows the problem is getting worse, not better. Cook’s flood analogy suggests the company sees memory cost pressures as an exogenous shock. But the fact that strong demand for the iPhone 17 and MacBook Neo is partly to blame means Apple’s own success is stretching its supply chain thinner. If component costs keep rising while order books remain full, margins on the next iPhone cycle could be pinched, and the high-end Mac business—a crucial growth engine—could face further delays and price increases that test customer loyalty.

Services Slowdown and the Regulatory Dent

The services business, with its 12% growth in the June quarter, is already trailing estimates, and Apple warned of further deceleration. The EU’s new subscription rules are a structural change: allowing developers to bypass the App Store’s 15-30% fee chips away at a high-margin revenue stream. Even a modest migration of payments away from Apple could compound the softness in gaming and streaming. With iPhone unit sales largely mature, services had become the narrative around Apple’s pivot to recurring, high-margin income. A deceleration now, just as regulators in other jurisdictions may follow the EU’s lead, raises questions about whether the App Store can sustain its historical growth trajectory.

The Tim Cook Era Ends: Ternus Inherits a Mixed Bag

Cook leaves a company far larger and more diverse than the one Steve Jobs handed him, but Ternus walks into a storm. He will immediately have to manage the release of new iPhones—a task complicated by the same shortages that just torpedoed the forecast. His hardware pedigree could be an asset if he can streamline the supply chain, but he also faces a talent drain to AI startups and the departure of senior executives nearing retirement. The stock’s 6% after-hours drop suggests investors already have their gavel out: the transition comes at a moment when Apple’s premium valuation relies on flawless execution, and the margin for error has rarely been thinner.

AI Catch-Up and the Talent War

Perhaps the most existential challenge for Ternus is AI. While Apple has reclaimed the title of world’s most valuable company and been seen as a safe haven from runaway AI spending, it has fallen behind peers like Nvidia and OpenAI in actual capability. The incoming CEO’s comments about “opportunity” in the space were vague, and there is no sign of a breakthrough product. Without a credible AI strategy, Apple risks being outflanked in the next platform shift. The brain drain to OpenAI and others adds urgency: Ternus must quickly convince top engineering talent that Apple—not its rivals—is the place to build the next generation of intelligent devices.

What Apple’s Supply-Chain Stumble Means for the Incoming CEO, Competitors and Your Portfolio

For investors: The immediate risk is that supply constraints persist into the crucial iPhone launch window, compressing margins. Watch for any signal on the July 31 call about pricing strategy for the new models—another round of retail price increases could dampen upgrade demand. The September quarter earnings (expected October/November) are now pivotal; any miss relative to the already-lowered guidance would be a red flag.

For customers: The just-announced Apple Upgrade leasing programme should cushion the sting of recent price hikes. If you’re eyeing a new MacBook or iPad, the current quarter’s wait times suggest ordering early or exploring the lease scheme, which locks in a monthly payment and lets you trade in at end of lease.

For John Ternus: The first 100 days must focus on two things: stabilising the supply chain and publicly laying out a concrete AI roadmap. With the stock already down, markets will be impatient. A rapid retention package for key AI talent and a clear product narrative—possibly around the foldable iPhone or smart glasses—could buy time.

For competitors: The supply pinch is an industry-wide problem, but Apple’s scale amplifies the impact. Nvidia and other AI-centric firms can use this window to widen the perception gap. Android handset makers may also find room to price aggressively if Apple’s delivery delays push buyers to alternatives.