Tim Cook and John Ternus
Apple has warned that memory chip prices are climbing at a rate its chief executive describes as unprecedented Adcave/Facebook

Apple has warned that surging memory chip costs are unlike anything it has seen before, with fresh price rises across iPhones, Macs and iPads now helping to shoulder the hit. The alert came on 2 November during its fiscal fourth-quarter earnings call, as the company reported revenue of $114.48 billion (€105.7 billion and £89.5 billion).

Apple had already raised prices on several Mac, iPad, HomePod and Apple TV products in June, citing tightening memory and storage supplies. The company left iPhone prices unchanged at the time, before increasing iPhone pricing in September.

Memory Pricing Warning

Chief executive John Ternus did not soften the message. 'What we're seeing with memory pricing right now is unprecedented,' he told analysts on the earnings call.

He said Apple saw higher memory costs in the September quarter than in the June quarter, although cheaper inventory bought earlier and lower costs on some non-memory components provided a partial offset.

The pressure is expected to worsen before it eases. Ternus said Apple expects 'even higher memory costs' in the December quarter, while purchases of memory are likely to become more expensive beyond that period.

That matters because memory is not a niche component. It sits inside iPhones, Macs, iPads and much of Apple's wider hardware range, so a sustained rise can affect margins across the business rather than one product line.

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Why Apple Raised Prices

Chief financial officer Kevan Parekh said Apple 'reluctantly' increased prices for iPad and Mac products in June, followed by iPhone pricing in September. He said the company was weighing both short-term and long-term considerations as it responded to the cost squeeze.

Asked by UBS analyst David Vogt about the impact on demand, Parekh said it remained 'really early' to assess the effect of the changes. He noted that iPad and Mac supply had remained constrained after the price adjustments.

Chief operating officer Sabih Khan said shortages of advanced-node chips were expected to persist into next year, particularly affecting iPad and Mac availability. He said constraints were easing as Apple shifted more products to the latest 2-nanometre 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,' Khan said.

Strong Results, Tighter Margins

The warning arrived alongside a better-than-expected quarter. Apple reported fiscal fourth-quarter revenue of $114.48 billion (€105.7 billion and £89.5 billion), ahead of analyst expectations of $113.39 billion (€104.7 billion and £88.6 billion), according to LSEG data cited by Reuters.

Earnings per share came in at $2.10 (€1.94 and £1.64), above the $1.99 (€1.84 and £1.56) analysts expected. Apple said the result included a favourable impact of $0.05 (€0.05 and £0.04) from tariff refunds.

Product revenue rose to $82.90 billion (€76.6 billion and £64.8 billion), from $73.72 billion (€68.1 billion and £57.6 billion) a year earlier. Services revenue increased to $31.57 billion (€29.2 billion and £24.7 billion), from $28.75 billion (€26.6 billion and £22.5 billion).

iPhone revenue climbed to $57.58 billion (€53.2 billion and £45.0 billion), from $49.03 billion (€45.3 billion and £38.3 billion) in the same quarter last year. Apple described the September quarter as a revenue record, with iPhone reaching a September-quarter record and Services hitting an all-time high.

AI Spending Fuels Memory Squeeze

The memory squeeze has been building for months. Apple's June price increases covered several MacBook, iPad, HomePod and Apple TV models, with the company pointing to tightening memory and storage supplies as AI infrastructure spending accelerates.

In July, then-Apple chief executive Tim Cook described rising memory prices as a '100-year flood' and suggested the DRAM market may need more suppliers. He said Apple expected memory costs to rise further, with higher DRAM prices only partly offset by savings elsewhere and lower-cost inventory bought before the surge.

Asked whether Apple can continue to pass on those costs without affecting demand, Parekh said it was too soon to assess the impact.

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