Apple Inc. (NASDAQ:AAPL) has warned that soaring memory prices are putting significant pressure on its product costs, even as the company has already raised prices across several hardware categories. During its fiscal fourth-quarter earnings call, CEO John Ternus described the current memory pricing as "unprecedented" and suggested that costs could continue to climb beyond the December quarter. Ternus noted that inventory benefits and lower non-memory component costs might help offset some of the rising expenses.
Apple COO Sabih Khan highlighted that supply constraints, particularly due to shortages of advanced-node chips, are expected to persist into next year. These constraints are primarily affecting iPad and Mac availability, driven by stronger-than-expected demand. Khan mentioned that the constraints are easing as Apple transitions more products to the latest 2-nanometer technology. However, he cautioned that memory-related issues will continue to impact supply in the December quarter.
Apple CFO KevIn Parekh admitted that the company "reluctantly" increased prices for iPad and Mac products in June, followed by iPhone pricing adjustments in September. Parekh emphasized that Apple is carefully considering both short-term and long-term implications of these price changes. In response to UBS analyst David Vogt, Parekh stated that it is "really early" to assess the impact of these pricing adjustments on demand, noting that supply constraints for iPad and Mac have persisted despite the changes.
The company's latest comments come on the heels of stronger-than-expected fiscal fourth-quarter results. Apple reported $114.48 billion in revenue and $2.10 in earnings per share, surpassing analyst estimates. 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 a growing issue, with Apple raising prices across several Mac, iPad, HomePod, and Apple TV products in June, citing tightening memory and storage supplies amid rising AI infrastructure spending.