Tim Cook says iPhone 17 demand is ‘off the charts’, but supply constraints impacted sales

Source: 9to5Mac

Overview

Apple announced its Q2 2026 results, reporting $56.99 billion in iPhone revenue. The figure was slightly below the average analyst expectations, but Tim Cook told Reuters that Apple would have sold more if supply constraints had not limited production.

iPhone 17 Demand and Supply Constraints

• Cook described iPhone 17 demand as “off the charts.”
• The company faced limited availability of advanced processor nodes, reducing flexibility in the supply chain.
• Apple’s ability to secure additional parts was hampered, impacting overall sales.

Chip Supply and TSMC

• All iPhone processors are manufactured by TSMC, which is currently experiencing a surge in chip demand due to the AI boom.
• Historically, Apple was TSMC’s largest customer by a wide margin, but that leverage has diminished amid the current market dynamics.
• Despite the chip bottleneck, Apple continues to manage higher component pricing for memory and other parts.

Financial Performance

• Gross margins for the quarter were 49.2%, surpassing estimates. This figure includes a contribution from services, which typically have higher margins than hardware.
• Apple does not disclose unit sales for individual hardware models, but the iPhone 17 Pro and Pro Max are presumed to lead sales, aided by the new orange color option and redesigned aluminum chassis.
• The base iPhone 17 introduced the same screen technology (ProMotion and always‑on display) as the Pro models for the first time.
• Apple also launched the lower‑priced iPhone 17e during the March quarter.

Mac Division

• The Mac segment performed strongly, likely driven by the popularity of the MacBook Neo.
• Overall company revenue reached $111 billion with net profits of $29.58 billion, marking a record for the March quarter.