Apple Shatters March Quarter Records, but Supply Can't Meet Demand
Apple Inc. reported a record $111.2 billion in revenue for the March quarter, up 17% year-over-year. The tech giant admitted it cannot make Macs fast enough to satisfy soaring demand, particularly for the new MacBook Neo.
"We under-called the level of enthusiasm that would be with it," said outgoing CEO Tim Cook during the earnings call, referring to the MacBook Neo. The company saw a record number of new-to-Mac customers this quarter.
MacBook Neo Drives 'iPhone Moment' for Macs
Cook described customer response to the MacBook Neo as "off the charts." The affordable laptop is attracting users, including a large school district switching entirely to Apple. Kansas City Public Schools is moving high school students from Windows and Chromebooks to MacBook Neos, completing an all-Apple district.
iPhone 17 family remains the most popular lineup in Apple's history, CFO Kevan Parekh said. Sales grew in every region, with double-digit growth in Greater China and Asia-Pacific.
Supply Constraints Hit Macs Hardest
The primary challenge is sourcing enough advanced processor nodes for both iPhones and Macs. Cook noted that the majority of supply constraints in the June quarter will be on several Mac models due to sustained high demand and less supply chain flexibility.
"It will take several months to reach supply/demand balance," Cook said. The constraints affect Mac mini and Mac Studio, which are increasingly used as AI and agentic AI platforms. "Customers seem to recognize the power of those systems to run AI," he added.
Background
Apple's installed base now exceeds 2.5 billion devices, following a strong first quarter. The company is in the midst of a leadership transition: Tim Cook will step down, with incoming CEO John Ternus set to take over. Ternus called this "the most exciting time in my 25-year career at Apple to be building products and services."
The March quarter record of $111.2 billion revenue significantly outperformed analyst expectations. Apple saw growth in both developed and emerging markets, with China revenue up 28% to a quarterly record.
What This Means
For consumers, the MacBook Neo's popularity means potential delays and longer wait times. Businesses and education sectors planning to adopt Apple's AI-capable Macs may face procurement challenges.
Analysts interpret the supply squeeze as a signal of Apple's growing reliance on premium chip manufacturing capacity. The company's push into AI hardware—especially with Mac Studio and Mac mini—positions it strongly for enterprise AI, but only if supply constraints ease.
Incoming CEO John Ternus faces the immediate task of resolving these bottlenecks. Investors should watch for updates on supplier partnerships or yield improvements at TSMC, Apple's primary chip manufacturer.
This story is breaking. Check back for updates.