Bloomberg's Mark Gurman Talks Apple Earnings

Apple

Across the shows: 28 speakers in other episodes, 12 bullish and 19 bearish calls, past 30 days

• Mark Gurman · BloombergBearish

  Apple's December-quarter guidance will be weaker than the beat, due to uncertain iPhone Duo supply and China and services softness.

  Apple beat on the fall quarter even without most major fall launches, driven by the iPhone 18 Pro and continued demand for the iPhone 17 Pro line and carrier deals. The guidance for the December quarter is the weak point. Gurman says it depends on how the iPhone Duo performs, and Duo supply is hard to read: pre-orders aren't shipping until late January for many buyers and retail stock is near zero. He also flags Greater China and services as either a sharp fall or a strong deceleration.

  “So this is a phenomenal report for Apple. The big news which I think will be less phenomenal is the guidance for the December quarter.”at 3:48

• Mark Gurman · BloombergBullish

  Constrained iPhone Duo supply will push Apple's revenue up into mid-to-late next year as pent-up demand converts.

  The Duo is very hard to get because of supply chain shortages, and buyers are being shut out of online and retail orders. Gurman expects that shortage to produce a strong quarter and positive reported numbers in fiscal Q2, Q3 and Q4 of next year, because Apple does not book revenue until the customer receives the phone. He thinks the pent-up demand will not hurt Apple. He also says availability should normalize around February or March.

  “The good news for Apple could be that we're going to see a very strong [tailwind] because of the supply chain shortages, and give them positive numbers into q two, q three, q four of next year.”at 5:10

• Mark Gurman · BloombergUncertain

  Apple under Ternus is running leaner with more layoffs and cost cuts, and more are expected.

  Gurman reports that CEO John Ternus wants Apple to run faster and leaner. He cites many layoffs, some quiet and some less quiet, and cost cutting that he expects to continue. He says the guidance will show whether these cuts are about revenue expectations. The view is mainly a report of reorganization and cost-cutting, with its margin effect left open.

  “I have reported though, he wants the company to run faster, wants it to run leaner, there have been a lot of under the radar layoffs and less under the radar layoffs at Apple. There's been cost cutting and I expect more cost cutting to happen”at 7:31

• Mark Gurman · BloombergBearish

  Apple has no strong AI strategy yet, and its cash pile has not produced any evidence of one.

  Gurman says Apple has seen no evidence it can turn its large cash holdings into a strong AI strategy. He compares it with ChatGPT, which he calls a game changer that acts like an all-day assistant, and says Apple has 'nothing close.' He is more positive about Siri AI, which he calls fantastic for about 90% of use cases and built on Google's Gemini model, but says it does not match a real-world assistant. The foundation works, but Apple still has to build something useful on top of it.

  “No. I think you're looking at the most optimistic view here, but at the same time, we've seen zero evidence from Apple that they're going to be able to successfully take advantage of that cash holding”at 8:41

• Mark Gurman · BloombergBearish

  Apple's services revenue will shrink as AI search pulls queries from Google, unless Apple monetizes AI search itself.

  Services growth is slowing, and Gurman traces part of that to AI. Google searches are down because of AI. A large part of Apple's services revenue is the revenue share from Google search in Safari. As users move to the Gemini app, ChatGPT, Claude, Muse, or Siri AI to get things done that they used to do in a search engine, that revenue falls. Apple has to find a way to make up the loss by monetizing AI search on its own platforms.

  “Well, the question is why and one of the answers is because Google searches are down because of AI and a big chunk of the revenue Apple gets from services is a revenue share from Google search done in Safari.”at 10:05

• Mark Gurman · BloombergBullish

  Apple's AI wearables, including smart glasses and camera AirPods, will make next year an extremely strong year.

  Gurman says Apple is excelling in AI hardware and names smart glasses and AirPods with cameras as products coming next year. He notes that the AirPods with cameras have been delayed before, but says they are coming. He also sees a full pipeline of new products, including the touchscreen MacBook Pro and HomePod-type home devices. Beyond that, he questions whether Apple will make another push into robotics, AR glasses or autonomy in 2028 and later.

  “Well, next year is gonna be an extremely strong year in terms of AI wearables, so where they're excelling is AI hardware.”at 11:24

• Mark Gurman · BloombergNeutral

  The midterm election outcome will not change Apple's situation, since tariffs will persist regardless of which party wins.

  Gurman says the midterms will have no real impact on Apple. He identifies tariffs as the main political issue for Apple, which came up under the Republicans in charge, and says he doesn't see that changing whichever party wins. He does not give a mechanism beyond that.

  “I think there's going to be no impact. You know, the big political thing when it came to Apple, you know, with the Republicans in charge has been tariffs. No matter who wins, I don't see that changing.”at 12:27