Tim Cook blamed the miss on supply constrictions.

Apple remains one of the most steadfastly profitable companies of the entire tech sector, if not the entire stock market in general. However, while they are still profitable, the supply constraints and chip shortages that have been hitting the entire tech industry in recent months have not spared them. During Apple’s Q4 earnings report yesterday, they unfortunately missed Wall Street’s expectations on their revenue.

“We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion,” Apple CEO Tim Cook told CNBC. “The supply constraints were driven by the industry wide chip shortages that have been talked about a lot, and COVID-related manufacturing disruptions in Southeast Asia.”

Sales of Apple’s flagship products like iPhones are still up year-over-year, though not quite to the extent that Wall Street was hoping for. Cook believes that the supply constraints will only worsen as we enter into the December quarter and holiday shopping season, likely as all tech manufacturers scramble to obtain the parts they need to send out their products. Even so, Cook is still confident that Apple will turn an impressive profit come the holiday season.

$AAPL loses its title as the world's most-valuable company to $MSFT after its first quarterly sales miss in four years.https://t.co/gtPBBANc95

— TheStreet (@TheStreet) October 29, 2021

“So we’ve finished about a month of the quarter. The COVID related manufacturing disruptions have improved greatly. The chip shortages linger on,” Cook said.

In addition to hardware, Apple is still turning a tidy profit on subscription-based services. Apple currently has approximately 745 million paid subscriptions running, which encompasses services like Apple Music and apps from the Apple App Store.

“That’s up 160 million year on year, which is up five times in five years. So it’s been quite the growth cycle,” Cook said.