While the growth of AI has led to high demand for hardware components, Apple and other hardware manufacturers are facing what CEO Tim Cook called the “hundred-year flood of memory prices”, which affects the cost of producing iPhones, MacBooks and other devices.
Apple Explain Its most recent earnings report was its “strongest June quarter ever,” with iPhone and Mac sales performing better than expected, up 22% and 29%, respectively, compared to last year. However, the company is dealing with the memory shortage, known as RAMageddon, even worse. Apple’s biggest challenge is securing the specialized memory used in Apple’s silicon chips, which power the A-Series and M-Series processors used in iPhones and Macs.
“We continue to expect high levels of demand. However, with less flexibility in the supply chain, we expect the impact of supply constraints to increase significantly sequentially,” Cook said on Apple’s quarterly earnings call. “We’re seeing some major constraints right now with limited flexibility in the supply chain to address it.”
Apple is worried enough about the supply shortages it reports $11.1 billion In inventory, almost double the $5.7 billion it reported last September. This marks a break from Cook’s long-held supply chain approach, which has been emphasized Brief How much inventory does Apple have on hand?
These restrictions made Apple “hesitant” to raise the prices of Macs and iPads last month, Cook added. Other companies that have raised hardware prices include Meta, Samsung, MicrosoftAnd Sony.
Mr. Cook said, “We will move forward in terms of supply as necessary.
For the coming quarter, Apple is forecasting revenue growth between 9% and 11% each year. But in the last several quarters, Apple has maintained growth of about 16% year-on-year. Of course, it worries investors – Apple stock down 6% in after hours trading.
When Senior VP of Hardware Engineering John Ternus steps into the CEO role in September, the company may be facing a tough time, but at least Apple isn’t alone in its supply woes.
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