Apple Inc. (NASDAQ:AAPL) warned that rapidly rising memory prices continues to increase pressure on product costs, after the company already raised prices across several hardware categories.
CEO John Ternus, during its fiscal fourth-quarter earnings call, said, “What we’re seeing with memory pricing right now is unprecedented.” He added that memory purchase prices could continue climbing beyond the December quarter. The CEO expects inventory benefits and lower non-memory component costs to provide some offset.
Apple COO Sabih Khan said supply constraints stemming from shortages of advanced-node chips are expected to persist into next year, particularly affecting iPad and Mac availability, amid stronger-than-expected demand. However, he noted that constraints are easing as Apple shifts more products to the latest 2-nanometer technology.
“And for the December quarter, we expect constraints on Mac and iPad, primarily driven by memory, as demand has been higher than what we expected.”
Meanwhile, KevIn Parekh, Apple’s CFO, said the company “reluctantly” increased prices for iPad and Mac products in June, followed by iPhone pricing in September, , adding that Apple is weighing both short-term and long-term considerations.
Responding to UBS analyst David Vogt, Parekh said it remains “really early” to measure the pricing changes’ effect on demand. He noted that iPad and Mac supply stayed constrained after the adjustments.
Strong Results Amid Rising Memory Costs
Apple’s latest comments follow stronger-than-expected fiscal fourth-quarter results. The company reported $114.48 billion in revenue and $2.10 in earnings per share, topping analyst estimates. Apple’s product revenue rose to $82.90 billion from $73.72 billion year-over-year, while Services revenue increased to $31.57 billion from $28.75 billion. iPhone revenue climbed to $57.58 billion from $49.03 billion.
The memory squeeze has been building for months. Apple raised prices across several Mac, iPad, HomePod and Apple TV products in June, citing tightening memory and storage supplies amid rising AI infrastructure spending, while keeping iPhone prices unchanged.
In July, Apple’s former CEO Tim Cook described soaring memory prices as a “100-year flood” and said the DRAM market may need more suppliers, amid changing semiconductor demand linked to AI. Cook said Apple expects memory costs to rise further, with higher DRAM prices only partially offset by savings in other components and lower-cost inventory purchased before prices surged.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: courtesy of Apple.
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