● Covered by 4 sources · 4 reportsMedium impact1 negative3 neutral
Apple's Inventory Surges 154% Amid "Unprecedented" Memory Chip Price Hikes
Key points
- Apple's Q4 inventory reached $14.54 billion, up 154.3% year-over-year.
- Memory chip costs are rising due to increased demand from AI datacenters.
- Apple CEO John Ternus called current memory pricing "unprecedented."
- Higher memory costs are expected to impact Apple's gross margins.
- Apple increased prices for iPads, MacBooks, and iPhones to offset costs.
- Apple expects higher memory costs in the December quarter and into 2027.
- Apple's manufacturing bill climbed by $33 billion in recent months.
- Apple partially offset costs using existing inventory and non-memory component savings.
- Apple charges over three times its own cost for storage upgrades on the iPhone 18 Pro.
Inventory Growth Driven by Memory Costs
Apple's inventory saw a significant increase in its fiscal fourth quarter, rising from $11.09 billion in Q3 to $14.54 billion in Q4, a 31.1% quarter-over-quarter jump. Year-over-year, inventory grew by 154.3% from $5.72 billion in the fourth quarter of 2025. This stockpiling, particularly of computer memory, is a direct response to escalating memory chip prices.
Unprecedented Price Hikes
Apple CEO John Ternus stated that the current memory pricing is "unprecedented." He noted that the company experienced higher memory costs in the September quarter compared to the June quarter and expects "even higher memory costs" in the December quarter. This surge in prices is attributed to increased demand for memory chips from AI datacenters, a trend referred to as "RAMageddon" within the tech industry.
Impact on Gross Margins and Device Pricing
The rising memory costs are projected to impact Apple's gross margins. The company forecasted a gross margin of 45% to 46% for the December quarter, a decrease from the 47.9% reported in the September quarter. To partially offset these increased expenses, Apple implemented price increases earlier in the year for some of its devices, including Mac and iPad at the end of June, and iPhones in September.
Offsetting Measures and Future Outlook
While higher memory costs are a concern, Apple has taken steps to mitigate the impact. Ternus mentioned that the benefit of carrying inventory and lower costs on certain non-memory components partly offset the higher memory costs in the September quarter. The price adjustments on devices like iPads, MacBooks, and iPhones also provided some offset against the rising component costs.
Updates
- Apple charges over three times its own cost for storage upgrades on the iPhone 18 Pro.
- Apple expects higher memory costs in the December quarter and into 2027.
- Apple's manufacturing bill climbed by $33 billion in recent months.
- Apple partially offset costs using existing inventory and non-memory component savings.
✨ 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
A Wall Street Journal analysis indicates Apple charges customers over three times its own cost for storage upgrades on the iPhone 18 Pro. This comes as Apple reports increased memory costs are impacting its profit margins, despite the significant markup on upgrades.
Apple anticipates significantly higher memory costs in the December quarter and into 2027, with its manufacturing bill increasing by $33 billion in recent months. The company has partially offset these costs through existing inventory, non-memory component savings, and product price adjustments, but expects continued pressure. This trend is driven by surging RAM prices, exacerbated by high demand from AI infrastructure development.
Apple reported an "unprecedented" rise in memory chip prices, which is expected to impact its profit margins in the fourth quarter. The company has already increased prices for iPads, MacBooks, and iPhones to offset some of these rising costs, which are driven by increased demand from AI datacenters.
Apple's inventory increased by 31.1% quarter-over-quarter and 154.3% year-over-year, reaching $14.54 billion in Q4, driven by rising memory chip costs. The company anticipates continued increases in memory costs, which will impact gross margins and may lead to further device price adjustments.