Apple has warned that rising memory-chip prices will weigh on profitability during the holiday quarter, even as strong iPhone demand helped it deliver better-than-expected fiscal fourth-quarter results.
The company expects gross margin of 45% to 46% for the quarter ending in December, compared with 47.9% in the previous quarter. Executives said memory costs are likely to keep increasing into next year, although Apple has taken steps to secure supply.
Strong Results, Cautious Outlook
Apple reported fiscal fourth-quarter revenue of $114.48 billion, exceeding analysts’ estimate of $113.39 billion. Earnings reached $2.10 per share, ahead of expectations of $1.99. iPhone revenue was $57.58 billion, supported by early demand for the iPhone 18 Pro range.
Despite the earnings beat, Apple shares fell as much as 4% on the call after executives outlined the outlook. The stock later pared its decline to around 2%.
Securing Supply and Managing Costs
Chief Operating Officer Sabih Khan said Apple was working closely with memory suppliers, while purchasing commitments increased by $33 billion during the quarter. CEO John Ternus said higher memory costs had been partly offset by existing inventory and lower costs for other components.
Apple has also raised prices on products. It increased prices on iPhone 17 models by $100 and lifted prices on certain MacBooks, helping cushion the effect of more expensive components.
New Products Bring Opportunities and Challenges
The results come as Ternus, who became CEO in September, oversees a new product strategy. Apple is spacing out iPhone launches while adding touchscreen laptops and smart-home devices.
Its first foldable phone, the iPhone Duo, sold out quickly but remains supply-constrained. Apple is replacing some units returned over display issues, though it has not given a timeline for meeting demand.
Services revenue growth is forecast at 8% to 9%, below analyst expectations. Apple also faces costs from AI features using cloud computing, and executives indicated that some server-based services may have usage limits.
The holiday quarter will test whether strong product demand and pricing power can offset rising component and AI-related expenses for the company.
Also Read :- Apple’s iPhone Duo Faces Backlash As Users Report Cracks On Folding Screen
