An Apple inventory surge pushed the company’s holdings to $14.54 billion in its fiscal fourth quarter, up 154.3% from the prior year. The increase reflects efforts to secure components as memory chip prices continue climbing.
Inventory rose 31.1% to $11.09 billion in the June quarter, up from $5.72 billion a year earlier. Apple disclosed the figures alongside its fourth-quarter earnings on Monday, Nov. 2.
Apple Inventory Surge Reflects Rising Memory Costs
Apple expects higher memory prices to pressure profitability during the holiday quarter. The company forecast a gross margin of 45% to 46% for December, down from 47.9% in September.
CEO John Ternus described current memory pricing as unprecedented during the earnings call. He said higher component costs had already affected the September quarter, although existing inventory and cheaper non-memory components provided some relief.
Apple expects further increases in December and beyond. Price increases introduced earlier this year across Mac, iPad and iPhone products will partially offset those expenses.
The company previously increased inventory to prepare for supply shortages linked to growing AI infrastructure demand. Ternus warned that the financial benefits of previously purchased memory would gradually decline as replacement costs rise.
Apple has also increased its manufacturing purchase obligations by $33 billion between June and September to strengthen component supply. Chief Operating Officer Sabih Khan discussed the commitments during the earnings call but did not rule out additional device price increases.
Supply Constraints Weigh on iPad Sales.
Apple reported $6.2 billion in iPad revenue for the September quarter, missing analysts’ expectations of approximately $6.7 billion. Sales fell 10% year over year, and the company cited supply constraints.
Meanwhile, iPhone and Mac sales exceeded expectations. Apple reported total quarterly revenue of $114.5 billion, a 12% increase from the previous year.
Rising memory costs have already influenced Apple’s device pricing. Its latest guidance suggests those pressures will continue despite efforts to secure additional supplies.
