Apple's Mac business is booming, but the memory market has other plans

Apple's Mac business has seen a surge in sales for the fiscal year 2026, but the rising costs of memory components are posing a challenge to the company's record-breaking performance. This issue came to light during Apple's fiscal fourth-quarter earnings call held on Monday, with new CEO John Ternus warning analysts about the unprecedented memory pricing situation.

Apple had already increased prices on various hardware products, including Macs and iPads in June, and iPhones in September. Despite these price hikes, memory costs have not yet peaked. Ternus anticipates even higher memory expenses for the upcoming December quarter, signaling that the memory issue will persist beyond the end of the year.

Despite the challenges, Mac buyers have continued to show interest, with Apple reporting a 24% increase in Mac sales year-on-year for the September quarter, amounting to $10.8 billion. Mac models such as the MacBook Neo and MacBook Pro have been instrumental in driving this growth. However, supply constraints are now emerging as a significant concern, particularly for iPhones, Macs, and iPads.

For the December quarter, Apple expects supply constraints to affect Mac and iPad sales due to soaring demand. CFO Kevan Parekh noted that gross margins have declined by approximately one percentage point between the June and September quarters, primarily due to memory costs. Apple expects its gross margin to further decrease from 47.9% in the September quarter to between 45 and 46% in December, mainly attributable to higher memory costs.

Parekh also mentioned that memory costs will impact Apple's plans for implementing AI features like Siri. Ternus remains optimistic about the Mac's potential as an AI device, highlighting the performance of Mac mini and Mac Studio, which utilize M6 processors and can handle demanding workloads locally. The company has also refreshed its Mac lineup with M6-powered devices and a touchscreen MacBook Pro, encouraging customers to upgrade.

Despite the supply challenges, Apple reported a 12% year-on-year increase in revenue for the September quarter, with iPhone sales growing by 17% to $57.6 billion. Services revenue reached $31.6 billion, a 10% increase. Apple forecasts revenue growth of 7 to 10% in the December quarter, despite the ongoing supply constraints.