Apple iPhone Duo sells out; CEO warns supply constraints will extend to early 2027

Apple's new CEO John Ternus confirmed during the company's fiscal fourth-quarter 2026 earnings call on November 2 that supply constraints for the iPhone Duo will likely persist into early 2027. The foldable smartphone, which launched in late October at $1,999, sold out within hours of preorders opening and within days on Apple's website. Customers who did not preorder are now facing shipping delays into late January 2027, while Verizon has apologized to customers by offering gift cards to offset the wait.

Apple's Chief Operating Officer Sabih Khan stated on the earnings call that "iPhone Duo is constrained as of today" and that "it is really hard to predict when supply and demand will be in balance." The company attributed the shortages to two main factors: unprecedented rises in memory chip costs driven by the artificial intelligence industry's expansion into data centres, and widespread microprocessor shortages, particularly for advanced-node chips manufactured by Taiwan Semiconductor Manufacturing Company (TSMC). Ternus described the foldable device as "the most transformational iPhone since the original," despite acknowledging that early users have reported screen cracking issues along the inside fold, which Apple said affects a small number of units and will be replaced.

To offset rising component costs, Apple has raised prices across multiple product lines. The company increased prices on iPad and Mac products in June, followed by increases on iPhone 16, 17, 17e, and Air models in September, with most devices rising approximately 20 percent. Ternus stated that memory pricing is "unprecedented" and that the company expects "even higher memory costs" in the December quarter. These pricing decisions were made "reluctantly," according to CFO Kevan Parekh.

Despite supply headwinds, Apple reported strong financial results for the quarter ending September 26. Total revenue reached $114.5 billion, a 12 percent increase year-over-year. iPhone revenue rose 17 percent to $57.6 billion, while Mac sales grew 27 percent to $10.7 billion, both reaching record levels. However, iPad sales declined 10 percent and wearables sales fell 7 percent. The company's gross margin stood at 47.9 percent, bolstered by approximately one percentage point from tariff refunds following the U.S. Supreme Court's February 2026 decision to strike down certain Trump-era tariffs. Annual revenue reached $479 billion, a 15 percent increase.

Apple deepened its partnership with Perryman, a titanium producer, to source materials for the iPhone Duo. The company stated it is working "hard to get this revolutionary new product into the hands of our customers as quickly as possible," though it acknowledged that broader supply pressures are expected to continue into 2027, particularly affecting iPad and Mac products alongside the Duo.