Rising Memory Costs Threaten Apple's Financial Future

Apple's financial future is being threatened by rising memory costs, according to CEO Tim Cook. In his last earnings call before stepping down as CEO, Cook described the situation as a '100-year flood' in memory pricing.

The demand for memory products has skyrocketed due to the growth of data centers processing artificial intelligence information, leaving supply in short supply and driving up costs exponentially.

Apple's CFO Kevan Parekh confirmed that more than 100% of the company's gross margin decline can be attributed to rising memory costs. The company expects its fourth-quarter gross margin to fall between 47% and 48%, down from 50.1% in the previous quarter.

Despite these challenges, Apple is planning price increases on iPhones and other devices to offset some of the impact. However, management expects costs to continue rising in the current quarter.