Apple Inc. (AAPL) CEO Tim Cook has stated that the severe shortage of memory chips, which forced the company to raise product prices, will continue to exert significant pressure on the tech giant this autumn.
During the earnings conference call on Thursday evening, Cook, who is set to step down as CEO, remarked: "On pricing, we reluctantly chose to increase prices. The current surge in memory chip prices is, in my view, a once-in-a-century wave of price hikes."
The unrelenting demand for high-bandwidth memory (HBM) and high-end dynamic random access memory (DRAM) chips, essential for AI servers, is fueling an increasingly tight supply-demand balance in the memory chip market.
Companies including Nvidia, Microsoft, Amazon, and Meta Platforms are all racing to build AI infrastructure, leaving most of the premium AI memory production capacity from SK Hynix, Samsung Electronics, and Micron Technology fully booked for most of 2026.
After years of market downturn, the current shortage is driving memory prices sharply higher, giving chip manufacturers stronger pricing power. Industry experts forecast that the memory supply crunch will persist into 2027, with leading memory suppliers continuing to benefit.
To protect its own gross margins, Apple has recently raised prices on its Mac, iPad, and Vision Pro product lines globally by between $150 and $300, while also increasing subscription fees for Apple Music and the Apple One bundle.
Analysts predict that, due to supply chain pressures, the upcoming iPhone 18 Pro series could see price increases of up to $300.
The limited production capacity also hampers Apple's ability to fully meet market demand, leading the company to provide a conservative financial outlook for the current quarter.
Apple has issued a Q4 fiscal 2026 revenue guidance that fell short of market expectations, projecting a 9% to 11% year-over-year growth rate, compared to the consensus estimate of 12%.
JPMorgan analyst Samik Chatterjee noted in a research report: "We remain optimistic about the various demand drivers, including edge AI driven by the widely-available intelligent Siri, which can stimulate long-term hardware upgrade cycles for Apple. However, given the supply bottlenecks and gross margin pressure, we have lowered our short-term earnings forecasts."
The cautious forward guidance overshadowed the company's solid operational performance for the quarter.
Apple's Q3 fiscal 2026 earnings per share came in at $2.02, with total revenue reaching $109.4 billion. Wall Street had expected EPS of $1.89 and revenue of $108.8 billion.
iPhone revenue was $54.2 billion, exceeding the anticipated $53.5 billion. However, revenue from the company's second-largest segment, Services, totaled $30.7 billion, falling short of the $31.3 billion forecast.
Apple shares opened 8.7% lower on Friday.
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