Apple Warns Memory Costs Will Squeeze Margins

Apple expects its December-quarter gross margin to fall to between 45 and 46 per cent as memory-chip prices rise.

Updated on Nov. 9, 2026 in Economic Indicators

Apple Warns Memory Costs Will Squeeze Margins

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Apple reported $114.5 billion in revenue for the period ending 26 September 2026, up 12 per cent from the previous year, and warned that rising memory-chip prices will further pressure its profitability. Its shares fell in early trading on 3 November.

Why it matters

Higher memory-chip prices are a principal factor behind Apple's margin forecast, and Apple's chief financial officer also cited component costs and spending on the development of its AI-powered Siri as pressures on profitability. Existing memory inventories bought at lower prices will gradually be replaced by components acquired at higher market prices.

Apple's fourth-quarter gross margin reached 47.9 per cent, including roughly one percentage point from tariff refunds, and the company expects it to fall to 45 to 46 per cent in the December quarter. Apple's supplier and manufacturing purchase obligations reached approximately $89.7 billion, and the split of the expected margin decline between memory costs and Siri-related spending has not been disclosed.

The players

Apple

Apple is the Cupertino-based technology company whose iPhone and services businesses drive its revenue, and it is among the largest publicly traded companies in the world.

John Ternus

John Ternus is Apple's chief executive, whose first earnings presentation in that role took place on 2 November 2026.

The details

Apple's chief financial officer identified component costs and spending tied to the development of Apple's AI-powered Siri as pressures on profitability. Memory manufacturers allocate production capacity between products and customer groups, and high-bandwidth memory for AI accelerators can offer attractive commercial returns, shaping the pricing environment Apple faces.

26 September 2026: Apple's fourth-quarter reporting period ended.
2 November 2026: Apple released quarterly results and held its first earnings presentation under chief executive John Ternus.
3 November 2026: Apple's shares fell in early trading.
Final three months of 2026: Apple expects its gross margin to decline.

Market Dynamics

Apple's margin warning echoes the memory price cycles of the early 2020s, when shortages pushed component costs up across device makers. Memory manufacturers now steer capacity toward high-bandwidth chips for AI accelerators, a shift that continues to tighten supply for consumer electronics makers such as Apple.

Higher memory costs can flow through to the prices of consumer electronics, affecting household budgets for phones and computers. Shoppers weighing a device purchase may see pricing pressure over the coming months as manufacturers absorb or pass on component cost increases.

The takeaway

Component cost swings can change a major company's profit outlook quickly, so watching memory prices offers a useful early signal for future electronics pricing. Readers tracking their own spending on devices may find it helpful to delay upgrades when price pressures are visible.