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Cook's Last Call: Hints at Chinese Memory Chips, Apple Intelligence Cleared in China

Apple's fiscal third-quarter earnings call on Thursday carried an extra layer of significance: it was Tim Cook's last as CEO. With incoming chief John Tornetta set to take the reins on September 1, Cook used the call to address both the company's performance and the road ahead. While the numbers were strong, his comments on supply chain woes and China's AI rollout painted a more complex picture.

A Farewell Call with Mixed Signals

Apple reported revenue of $109.4 billion for the quarter, a 16% year-over-year jump, with net profit climbing 27% to $29.8 billion. But the market wasn't impressed. Shares slid 8% in after-hours trading as investors focused on two shortfalls: services revenue and China sales both missed expectations. The company's guidance for the next quarter—9% to 11% revenue growth—also fell short of the 12% analysts had hoped for.

Cook acknowledged that supply chain flexibility has dipped below normal levels, and the impact on iPhones, Macs, and iPads will be "significantly greater" than last quarter. The bottleneck, he said, lies in advanced chip production—a thinly veiled reference to TSMC's wafer supply constraints.

A Nod to Chinese Memory Makers?

Perhaps the most intriguing moment came when Cook addressed the memory chip shortage. He described the current price surge as a "once-in-a-century flood," forcing Apple to raise prices. Then came the eyebrow-raiser: "It would be better if there were more than three memory suppliers," he said, adding that Apple is "evaluating all options."

Industry watchers took that as a clear signal that Apple is open to sourcing memory chips from Chinese manufacturers—a move that could diversify its supply chain and ease cost pressures. For a company that has traditionally relied on a handful of suppliers, this shift could have ripple effects across the tech industry.

Apple Intelligence Gets the Green Light in China

On the AI front, Cook revealed that Apple has received approval to launch its first Apple Intelligence features in China. While he didn't provide a timeline, he noted that developers and beta testers have given "very enthusiastic" feedback on the Siri AI upgrades. However, he cautioned that fully rolling out Siri AI to the Chinese market will require more work.

Cook also highlighted a key asset: Apple's paid subscription base has surpassed 1.5 billion users. That's a massive audience for AI-powered services, and it gives Apple a solid foundation to monetize its AI investments.

A Legacy of Challenges

In his final address to analysts, Cook took a moment to celebrate the Mac's record performance in emerging markets, particularly China. But the outgoing CEO also left his successor with a clear to-do list: navigate the supply chain crunch, manage the memory chip shortage, and deliver on the promise of AI in China.

For Tornetta, the transition may be smooth, but the road ahead is anything but. With supply constraints looming and AI competition heating up, the next chapter of Apple's story will be written under new leadership—and the stakes have never been higher.

Key Points

  • Apple's Q3 FY2026 revenue hit $109.4 billion, up 16% YoY, but stock fell 8% on weak guidance.
  • Tim Cook hinted at potential Chinese memory chip suppliers to address the "once-in-a-century" price surge.
  • Apple Intelligence has been approved for launch in China, with more work needed for full Siri AI rollout.
  • Apple's paid subscriptions surpassed 1.5 billion, providing a strong base for AI services.
  • Cook's final call highlighted supply chain challenges and China's importance as a growth market.