Apple’s fourth-quarter 2026 earnings call was the first for CEO John Ternus in his new role. CFO Kevan Parekh and Chief Operating Officer Sabih Khan also joined the discussion, which covered product demand, AI features, supply constraints and financial results.

Ternus told Reuters that Apple cannot currently meet demand for the iPhone Duo, and the company has not said when supply will catch up. He also acknowledged display issues, saying that only a “very small percentage” of units had been returned.

Apple plans to introduce usage limits for server-side AI features, including Siri AI and photo editing. Customers who need more capacity will be able to buy expanded access, but Apple has not disclosed prices or how much usage will be included with each iCloud+ plan. Parekh said it was too early to assess the balance between on-device processing and Private Cloud Compute, or to determine the associated costs.

Ternus said Apple sees potential to expand Siri’s capabilities, while stressing that users should understand what access AI agents receive. He described security and privacy as priorities and said Apple’s ability to use personal information on a device without making it accessible to Apple is a key distinction for its AI approach.

Asked whether Apple plans to merge iOS and macOS, Ternus said the company is focused on making each product the best it can be while offering features that work across devices. He said Apple has no fundamental changes planned, declining to elaborate further.

Greater China revenue rose 21% year over year to a quarterly record, driven primarily by iPhone and Mac performance. Apple also said it now has more than 2.5 billion active devices.

Memory costs were described by Ternus as unprecedented, with further increases expected in the December quarter and beyond. Price adjustments made in June and September, lower costs for some non-memory components and existing inventory helped offset some of the pressure.

The iPhone, iPad and Mac were all supply-constrained in the September quarter. Khan attributed the constraints to demand and limited availability of the advanced manufacturing nodes used for system-on-chip production. He said the situation is easing as more of the product lineup moves to 2-nanometer chips.

Apple’s iPhone revenue reached $57.6 billion, up 17% year over year and a September-quarter record. Mac revenue rose to $10.8 billion from $8.7 billion, while full-year Mac revenue increased to $37.9 billion from $33.7 billion in 2025. Ternus said Apple sold more Macs in fiscal 2026 than in any previous fiscal year.

iPad revenue fell to $6.2 billion from $7 billion a year earlier. Apple cited supply constraints and a comparison with the launch of the A16 iPad in the prior-year quarter. Services revenue set a new record at $31.6 billion, up from $28.8 billion, bringing its 2026 total to $123.3 billion. The App Store also recorded nearly one billion average weekly visitors, and Apple said the number of customers paying for at least one service increased.

Revenue from Wearables, Home and Accessories declined 8% year over year to $8.3 billion. Apple noted that the comparison was affected by the 2025 launches of the Apple Watch SE 3 and AirPods Pro 3. The new Apple TV 4K, HomePod mini and Apple HomeView did not ship during the September quarter.

For the December quarter, Apple expects revenue to grow 7% to 10% year over year, which would make it the company’s best quarter by revenue. Services revenue is forecast to increase 8% to 9%. The company expects gross margin of 45% to 46%, with higher memory prices and the ramp-up of Siri AI weighing on the figure. Mac and iPad supply constraints are also expected to continue, primarily because of stronger-than-expected demand for memory.

Sources: MacRumors.