Apple’s September iPhone numbers missed expectations, rising 6% year over year compared to expectations of a 10% increase. That shortfall was more than offset by positive guidance, which implies iPhone growth in December will be closer to 12%, versus expectations of 6%.

I think the best way to assess the state of the iPhone business is to look at sales over a two-quarter period. That approach smooths out the impact of capacity constraints. To put the iPhone results and guidance into perspective:

Heading into the report, the whisper number called for 10% iPhone growth in September. If Apple had met that whisper number and guided in line with Street expectations for December, total iPhone revenue over the two quarters would have been $124 billion.

Factoring in the 6% growth Apple reported in September and the guided “double-digit” growth for December — let’s call it 12% — total iPhone revenue over the two quarters now looks closer to $126 billion.

In other words, iPhone revenue over a two-quarter period is coming in about 2% above already elevated expectations.

On the call, the question came up about whether the iPhone will reach full supply by the end of the quarter. Cook said he didn’t know where things would end up. I have an idea, given that we’ve seen this before. Typically, when the iPhone is supply-constrained at the start of a cycle, supply and demand reach equilibrium by December. That means it’s unlikely that December demand will get pushed into March.

That’s important because this pattern will lead many analysts to expect a measurable step down in iPhone growth from the December to the March quarter. I expect most analysts will model iPhone growth next year roughly as follows:

• December: 12%

• March: 6%

• June: 6%

• September: 4%

That cadence would imply total iPhone growth of about 7% year over year for FY26. Before tonight’s earnings, the Street was looking for 6%.

The iPhone 17’s secret weapon is the massive FY21 upgrade pool, driven by the 39% growth that year. Because of that, here’s what I expect iPhone growth to actually look like:

• December: 12%

• March: 10%

• June: 8%

• September: 8%

That would put FY26 iPhone growth closer to 10%, ahead of where I expect the Street to land tomorrow at around 7%.

The one wild card is talk of a foldable iPhone. The more chatter and anticipation we see, the fewer phones Apple is likely to sell in FY26.

Since WWDC in June, Apple has delivered a clear message to investors: We know we’ve dropped the ball on AI, and we’re going to fix that. Just wait until you see what we deliver with our new Siri — it will blow you away.

Investors’ reaction has been to give the company time to figure out AI. As evidence of that shift, in the three months prior to WWDC, shares of AAPL were down 16%, while the Nasdaq was up 4%. Since the “give us time to get AI right” message at WWDC, shares of AAPL are up 34% compared to the Nasdaq’s roughly 20% gain.

Taking a step back, there’s a lot riding on the new Siri, because Apple has set that expectation. The company remains the gold standard for consumer tech quality, and when Apple signals that quality will be there, investors should expect just that. I anticipate that, in the months ahead, excitement will build around Apple finally getting Siri right, and that should lead to multiple expansion.

As for timing, on the September earnings call, Cook stuck to the script, saying we should expect the new Siri “next year.” Mark Gurman from Bloomberg has pegged a late March release, though I believe it will be closer to late April. Either way, we should see something by the latest at WWDC in June. That gives investors more than five months to dream about how good it will be.

I just laid out the case that AAPL’s multiple will expand heading into the launch of the new Siri. Given how low the bar is, I believe that outcome is likely. That said, anticipation is different from the reality of performance. Given how challenging Apple’s AI journey has been, it’s worth framing the case in which they miss the mark again.

That mark is a Siri that can contextualize our personal data, a digital assistant that’s smart about the user and just works. It’s a high hurdle and would represent Apple’s biggest product leap forward since the iPhone.

With expectations that high, it’s fair to ask: what happens if the new Siri is a flop? The answer is that shares of AAPL would likely sell off materially, and then begin to rebuild. The reason is simple: no other company has yet made meaningful progress in personalized AI on devices.

OpenAI is waiting in the wings, expected to show something next year and ship a product in 2027 that could sit alongside the iPhone and Mac. But what Apple has built, a tightly integrated ecosystem of hardware, software, and services — is the ideal platform for AI. And since no other company combines those elements the way Apple does, it means Apple has more time. potentially a couple of years, to figure AI out.

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