Apple is struggling with memory prices – further increases are possible
Apple expects further cost increases for memory chips and is therefore not indirectly ruling out additional price increases for its products. CEO John Ternus described the development in the balance sheet presentation as unprecedented.
Mitigation measures
The previous price adjustments and the build-up of inventories are intended to cushion the burden, but are increasingly losing their effect, explained the new man at the top of Apple. At the same time, the memory shortage could limit the availability of Macs and iPads during the holiday season. “What we are currently seeing in memory prices is unprecedented,” Ternus explained during a conference call on the current business figures. Purchasing costs were already higher in the September quarter than in the previous period. Apple expects another stronger increase for the December quarter. Even after that, storage prices are likely to continue to rise.
The group is trying to limit the consequences through stock purchases and more favorable conditions for other components. Apple’s inventories have more than doubled compared to the previous year and reached a value of 14.5 billion dollars (around 12.5 billion euros). Commitments for future manufacturing purchases also increased by $33 billion (around €28.5 billion) between June and September. However, Ternus expects that the advantage of previously cheaper storage will decrease over time.
When asked by an analyst, Apple COO Sabih Khan did not want to specifically answer the question of a further increase in sales prices. However, CFO Kevan Parekh explained that Apple had been reluctant to make the adjustments so far and had to consider both short-term and long-term effects. In June, the company raised prices for Macs and iPads, followed by iPhones in September.
Margin falls
The rising costs are already having an impact on profitability. For the current Christmas quarter, Apple expects a gross margin of between 45 and 46 percent, after 47.9 percent in the last quarter. In addition to memory chips, expenses for AI functions such as Siri also weigh on the result. Overall, the latest balance sheet was better than expected.
Apple achieved sales of $114.48 billion (approximately €98.5 billion) and earnings per share of $2.10 (approximately €1.80) in the fourth quarter of fiscal year 2026. The iPhone and Mac business in particular exceeded analyst estimates. The iPad division, however, lagged behind. Apple expects sales growth of seven to ten percent for the Christmas quarter. The share nevertheless reacted to the cautious margin outlook with after-hours losses.
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