Apple announced its fiscal Q1 2026 earnings yesterday, revealing a record-breaking revenue of $143.8 billion, up 16% year-over-year. Following the release of the quarter’s numbers, Apple CEO Tim Cook and CFO Kevan Parekh discussed the quarter with journalists and analysts on a conference call and also provided additional comments to various publications. Here’s a recap of some of the most interesting insights from those discussions.
AirPods Pro 3 Popularity Caught Apple Off-Guard
Cook told Reuters that while Apple’s Wearable, Home, and Accessories segment saw a roughly 2% drop in revenue year-over-year, the segment might have grown had the company not been surprised by the popularity of its new AirPods Pro 3 wireless earbuds, which were launched in September.
AirPods Pro 3 were supply-constrained during the quarter, and we think we would have grown year over year if we would not have been constrained.
Tim Cook
The remarks from Apple’s CEO indicate that the company underestimated the success of the new earbuds and did not have enough inventory available to meet demand.
AirPods Pro 3 offer improved sound quality, better active noise cancellation, longer battery life, heart rate monitoring, increased water resistance, and new ear tip sizes for improved fit.
According to Mactrast, the availability of the wireless earbuds seems to have improved, as Apple’s online store shows no shipping delays, and Amazon indicates it can deliver a pair to most customers later today.
Rising RAM Prices
During the earnings call, Cook also addressed the impact of rapidly rising RAM and SSD storage chip prices on Apple in the fiscal first quarter and how they might affect the company in the future.
Cook informed call participants that the increasing prices of RAM and storage chips had a “minimal impact” on the company’s gross margin last quarter, but he anticipates a “bit more of an impact” on Apple’s gross margin in the current quarter.
Cook added that Apple will explore various options to address this over the long term if necessary.
Despite the rise in component prices, Apple continues to deliver strong earnings, with revenue up 16% year-over-year. However, while gross margins reached 49% for the quarter, providing some flexibility to handle increasing component costs, Cook is indicating a more cautious approach for Q2.
Impressive iPhone 17 Lineup Sales
Apple’s financial performance was driven in part by exceptional demand for the iPhone.
iPhone revenue in the fiscal first quarter reached $85.2 billion, a new all-time high and a 23% increase from the $69.1 billion in sales in the year-ago quarter.
“iPhone had its best-ever quarter fueled by unprecedented demand, setting all-time records in every geographic segment,” Cook stated in Apple’s earnings results press release. Cook also informed CNBC’s Steve Kovach that demand for the “iPhone 17 family” during the holiday quarter was “simply staggering,” surpassing Apple’s expectations.
Apple’s current iPhone lineup includes the iPhone 17, iPhone Air, iPhone 17 Pro, and iPhone 17 Pro Max. Unfortunately, Apple does not provide a breakdown of iPhone revenue by model, so the popularity of individual models is unknown.
More Than 2.5 Billion Active Apple Devices
Apple disclosed in its earnings press release that it currently has over 2.5 billion active devices worldwide.
We are also thrilled to announce that our installed base now exceeds 2.5 billion active devices, a testament to the exceptional customer satisfaction for the best products and services in the world.
Tim Cook
This represents a significant increase from the installed base of 2.35 billion devices reported in the previous year’s quarter.
