Apple Inc ( NASDAQ:AAPL , XETRA:APC ) is expected to deliver a modest earnings beat for its September quarter, but a staggered iPhone launch, rising component costs and weaker services growth could weigh on its December results, according to Bank of America (BofA).
The brokerage expects September-quarter revenue of $113 billion and earnings per share of $1.97, compared with Wall Street estimates of $114 billion and $1.99, respectively, ahead of results due after the market closes on November 2.
The bank said the staggered launch of new iPhone models would affect quarterly sales patterns, with the Pro, Pro Max and Duo models released in September, while the base model and Air are scheduled for March.
The brokerage lowered its financial 2027 iPhone shipment forecast by 9 million units to 247 million, compared with the Street estimate of 260 million, reflecting a more cautious view of demand.
It expects component cost inflation, particularly for memory, to put pressure on gross margins over the coming quarters, although higher prices, product mix and cost-saving measures should offset part of the impact.
BofA estimates that memory costs could reduce iPhone gross margins by 900 basis points before pricing, mix and cost actions narrow the impact to 500 basis points, with the overall effect on company gross margin estimated at 250 basis points.
The brokerage forecasts total gross margin of 43.6% to 44.6% in the March quarter, below the 47.7% consensus estimate, and said the pressure should prove temporary, with margins recovering towards the end of financial 2027 and into financial 2028.
Services revenue is another concern, with BofA expecting growth of 10% in the September quarter, while App Store revenue growth slowed to 1.8% from 3.8% in the previous quarter.
The brokerage reiterated its 'buy' rating and $370 price target, but cautioned that near-term results could face headwinds relative to market expectations.
