[News] Apple Sees Holiday-Quarter Margins at 45%–46% as Memory Costs Soar; Inventory Jumps 154% Amid Stockpiling
While memory giants cash in on soaring chip prices, Apple is feeling the squeeze. The issue took center stage at its November 2 earnings call, the first under new CEO John Ternus, who described the surge in memory prices as “unprecedented,” according to TechCrunch. As noted by Reuters, Apple has taken steps to secure supplies amid mounting cost pressures.
The impact is evident in Apple‘s swelling inventories. According to TechCrunch, citing the company’s earnings, total inventory jumped 31.1% QoQ and 154.3% YoY to $14.54 billion in fiscal 4Q26, as the iPhone maker continued stockpiling components, particularly memory chips.
Soaring Memory Costs Squeeze Apple’s Holiday-Quarter Margins
Rising memory chip prices are set to take a toll on Apple’s profitability in the crucial holiday quarter, Reuters reports, citing CEO John Ternus. According to the Financial Times, Apple expects fourth-quarter gross margins of 45%–46%, below Wall Street’s 47% forecast.
With memory costs set to climb further in the December quarter, Apple expects price hikes introduced earlier this year—including for Macs and iPads in late June and iPhones in September—to partly cushion the impact, according to TechCrunch.
Yet the margin squeeze comes as Apple eyes robust holiday-quarter sales, projecting revenue growth of 7%–10% YoY in 4Q26, ahead of analysts’ 6% estimate. CFO Kevan Parekh expects the period to mark Apple’s highest quarterly revenue on record, according to Seeking Alpha.
Apple’s latest results already showed solid momentum, with September-quarter revenue climbing 12% YoY from $102.5 billion a year earlier, according to CNBC. Notably, the growth came despite just eight days of iPhone 18 Pro sales and no contribution from the flagship iPhone Duo, which debuted after the quarter ended, the report adds.
The results also marked the first full quarter reflecting Apple’s broader price hikes, including a $100 increase for iPhones, introduced amid tightening memory and component supplies, CNBC explains. According to Reuters, Apple’s fourth-quarter iPhone revenue reached $57.58 billion, topping the $56.54 billion LSEG consensus estimate.
iPhone Duo Faces Supply Crunch
Beyond soaring memory costs, Apple’s iPhone Duo also came under scrutiny over prolonged supply shortages and reports of cracked displays. In an interview with Reuters, CEO John Ternus acknowledged that “a very small percentage” of units had been returned over screen issues, with Apple providing replacements.
Despite the concerns, demand continues to outpace production, with no clear timeline for when supplies might catch up. “Duo is constrained as of today,” Ternus said. “The ramp is going well… but at this point, we’re not able to predict when supply and demand will be in balance.”
Notably, Apple’s supply challenges go beyond the Duo. COO Sabih Khan warned that limited advanced-node chip availability is also constraining production across its iPhone, Mac and iPad lineups, according to Yahoo! Finance. As reported by Wccftech, Apple is marking a major silicon milestone with its new A20 Pro, a 2nm chip built by TSMC powering the iPhone 18 Pro, Pro Max and Duo.
TrendForce estimates that global foldable smartphone shipments will edge up just 0.5% in 2026. Apple’s first foldable iPhone is expected to ship approximately 5 million units, accounting for about 24.8% of the market in 2026. With the overall market remaining largely flat, Apple’s entry is poised to accelerate shifts in market share among competing brands.
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(Photo credit: Apple)
