Apple Dodges Question on More Price Hikes as Memory Costs Climb

During Apple's recent earnings call, CEO John Ternus, COO Sabih Khan, and CFO Kevan Parekh addressed the company's challenges with memory costs. Ternus emphasized that memory pricing is currently unprecedented, noting higher costs in the September quarter and expecting them to worsen in the upcoming December quarter. Apple has managed to offset some of the September costs by utilizing previously stockpiled memory and securing lower prices on non-memory components.

The company anticipates similar factors will contribute to additional price hikes in June and September, as well as on iPads, Macs, and iPhones. While an analyst questioned if prices could rise again, Khan avoided a direct answer, stating that Apple is being cautious and deliberate in its evaluations. Parekh added that Apple's price increases are done reluctantly and that the company is carefully considering the impact on both short-term and long-term considerations.

Apple's inventory of memory has nearly doubled year-over-year to $14.5 billion, indicating the company's efforts to pre-purchase memory before costs rise further. However, Apple expects a decline in gross margin from 47.9% in the September quarter to 45-46% in the December quarter, primarily due to higher memory costs and additional Siri AI expenses. Mac and iPad supplies are expected to be constrained in the December quarter due to memory issues.