Apple Warns Supply Constraints Could Affect Mac, iPhone and iPad as Amazon Delivers Strong Earnings

Apple has warned that worsening supply chain challenges could affect the availability of its flagship products in the coming months, despite reporting stronger-than-expected quarterly financial results.

The technology giant posted revenue of $109 billion (£81 billion) for the quarter, a 16% increase from a year earlier, while net profit rose 26% to $29 billion. The results were driven largely by stronger iPhone sales, but investors focused on the company’s outlook, sending Apple shares down more than 7% in after-hours trading.

Speaking after the earnings release, outgoing Chief Executive Tim Cook said supply shortages, which have already affected Mac computers, are expected to spread to other major product lines.

“We’re seeing some very significant constraints currently with limited flexibility in the supply chain to remedy it,” Cook said.

Apple said shortages of key semiconductor components were among the factors affecting production. Many of its products, including Macs and iPhones, rely on advanced microprocessors manufactured by Taiwan-based TSMC.

However, Cook maintained that demand – not manufacturing capability – was the primary issue. During the June quarter, iPhone sales rose 22%, while Mac sales increased 25%.

Earlier this year, Apple said demand for the iPhone 17 made its launch the most successful in the company’s history.

“This is not a regular supply issue, it’s a demand forecast issue to be candid,” Cook said. “We’ve got a quarter ahead where we’ll be scrambling on the supply side.”

Apple also disclosed that its gross margin benefited from tariff refunds during the quarter. According to BBC calculations, the refunds amounted to roughly $1.1 billion, increasing the company’s gross margin by about two percentage points.

Cook said Apple plans to “reinvest the tariff refunds into the US.”

The company has previously announced plans to invest $600 billion in expanding domestic manufacturing over the next four years, although China remains its largest production hub.

Cook also discussed Apple’s next-generation Siri, which is currently in public beta as the company seeks to strengthen its position in the increasingly competitive artificial intelligence market.

He described the upgraded assistant as part of “an enormous opportunity for Apple going forward in AI.”

“The ability to run on device is also very strategic, and sort of a competitive weapon, if you will,” Cook added.

He also said discussions with European Union regulators were continuing, with Apple aiming to launch the new Siri “to everyone, everywhere at the same time.”

Amazon Shares Rise as Cloud Business Surges

While Apple’s outlook unsettled investors, Amazon received a positive market response after reporting robust earnings, with its shares climbing about 10% in after-hours trading.

The company reported negative free cash flow of $7.6 billion as it continued to invest heavily in artificial intelligence infrastructure. However, strong performance across its core businesses helped reassure investors.

Amazon’s sales rose 20% year-on-year to $200 billion, while net profit more than doubled to $63 billion.

Chief Executive Andy Jassy highlighted the performance of Amazon Web Services (AWS), which recorded 37% growth – its strongest expansion in four years.

“AWS is booming,” Jassy said.

Free cash flow measures the amount of money a company retains after covering operating expenses and capital investments. Amazon’s negative figure reflects its aggressive spending on AI infrastructure rather than weakening business performance.

Forrester analyst Tracy Woo said the company’s cloud growth demonstrated that Amazon’s investments were paying off.

She described the results as “a clear indicator that its infrastructure investments are meeting market demand rather than outpacing it.”

However, Woo cautioned that Amazon’s planned AI spending – which has increased from a projected $200 billion to $220 billion this year – raises longer-term questions about returns on investment.

“The bigger question is whether long-term commitments, capacity, power, leases, and guarantees will continue to be a source of economic exposure when capacity comes online in 2027 and 2028,” she said.