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Ternus faces first test as Apple chief

Quarterlies later on Monday will provide an insight into the new direction of the iPhone giant

by Ian Lyall
The image features the exterior of an Apple store, showcasing a prominent Apple logo on a glass facade. The background displays architectural details of a historic building, contrasting with the modern design of the store. — Credit: Photo by Niccolò Chiamori on Unsplash c Photo by Niccolò Chiamori on Unsplash

John Ternus faces investors for the first time as Apple's chief executive when the iPhone maker reports quarterly results after the US market closes on Monday.

Analysts expect revenue of $113.5 billion for the three months to September, up 11% on a year earlier and at the top of the company's own guidance.

Earnings are forecast at $2 a share, with a gross margin of 47.6%.

iPhone sales are expected to rise 15% to $56.5 billion, helped by the first nine days of sales of the iPhone 18 Pro and Pro Max.

Services, which include the App Store and subscriptions, are forecast to grow 10% to $31.6 billion.

Sales in Greater China are expected to jump 29% to $18.7 billion, extending a recovery that has been the swing factor for Apple this year.

The bigger focus, however, will be the outlook for the December quarter, the first full period of iPhone 18 sales.

It also covers the launch of the iPhone Duo, Apple's first foldable phone, which went on sale on 23 October.

Apple warned in July that supply was getting significantly tighter across its iPhone, Mac and iPad ranges.

Rising memory chip costs are also expected to squeeze margins.

Dan Ives, an analyst at Yorkville Ives, said the call would be the first chance to hear Ternus set out his priorities on artificial intelligence (AI), new products and returning cash to shareholders.

He expects Apple to sell about 10 million Duo handsets over the next few quarters as buyers of its most expensive iPhone trade up.

Ives said any detail on plans to charge for advanced AI features in Siri, Apple's voice assistant, would be the first concrete step towards making money from AI.

He believes this could add more than 15% to Services revenue over the next few years.

Ives rates the shares outperform, with a $400 price target against a current price of $344.63.

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by Ian Lyall