● Covered by 4 sources · 4 reportsMedium impact3 negative1 neutral
Apple anticipates significant supply constraints and increased memory costs in September quarter
Key points
- Apple forecasts significant supply constraints for iPhone, Mac, and iPad.
- Memory pricing is expected to increase further in the September quarter.
- Foreign exchange headwinds will reduce revenue growth by 2.5 percentage points.
- Apple's inventory increased to $11.1 billion, up 94% year-over-year.
- Q3 2026 revenue was $109.42 billion with EPS of $2.02.
Outlook for the September Quarter
During its Q3 2026 earnings call, Apple warned of significantly greater supply constraints for its iPhone, Mac, and iPad product lines in the September quarter. The company also anticipates continued foreign exchange headwinds, which CFO Kevan Parekh stated are expected to reduce Apple's revenue growth by approximately 2.5 percentage points compared to the June quarter.
Rising Memory Costs and Inventory Strategy
Apple CEO Tim Cook described the current memory market as a "hundred-year flood on memory pricing," noting that the company expects to pay even more for memory in the September quarter than it did in the June quarter. This rising cost has impacted gross margins and led to price increases on some MacBooks and iPads in June.
In response to anticipated shortages, Apple has increased its inventory to $11.09 billion, an 87% increase year-over-year and a 94% increase over nine months. This inventory build consumed $5.46 billion in cash over nine months.
Q3 2026 Performance
Apple reported strong Q3 2026 results, with revenue reaching $109.42 billion, exceeding expectations of $108.65 billion. Earnings per share (EPS) jumped 29% to $2.02, surpassing estimates of $1.89. iPhone and Mac revenue showed double-digit growth, with iPhone sales up 22% and Mac sales up 29% year-over-year.
However, iPad revenue declined 5% year-over-year, and Services recorded its first sequential decline since 2022, though still achieving a 12% year-over-year increase to $30.73 billion. Despite the strong Q3 performance, Apple's stock traded approximately 6.5% below its closing price following the earnings call due to the cautious outlook.
Impact on Product Lines
The supply constraints are expected to affect Apple's most important products, including the iPhone, Mac, and iPad. The challenge is particularly acute for advanced memory nodes used in Apple silicon chips, which power the A-Series and M-Series processors in these devices. Cook noted that the company has "limited flexibility in the supply chain to remedy it."
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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How outlets covered it
Apple CEO Tim Cook stated the company anticipates paying more for memory in the September quarter, following recent price hikes that significantly impacted the June quarter's gross margin. This trend is expected to continue past September, affecting Apple's profitability and inventory strategy.
Apple exceeded revenue and earnings per share expectations in its fiscal Q3, reporting $109.42 billion in revenue and $2.02 EPS. The company navigated supply constraints and memory shortages, which led to price increases on MacBooks and iPads in June. This performance, despite challenges, contributed to Apple's stock reaching record highs and briefly surpassing a $5 trillion market valuation.
Apple is increasing its inventory to $11.1 billion, nearly double its previous amount, in response to expected significant supply constraints for hardware components, particularly advanced memory nodes. This shift in strategy and the rising cost of components have led Apple to reluctantly raise prices on some products and anticipate lower revenue growth.
Apple announced during its Q3 2026 earnings call that it expects supply constraints to increase significantly in the September quarter, affecting iPhone, Mac, and iPad products. This projection, alongside foreign exchange headwinds, is expected to impact revenue growth for these key product lines and services.