Apple inventory jumps 31% in Q4 as memory chip costs surge
Apple reported a 31% rise in fourth-quarter inventory to $14.5 billion, citing sharply higher memory-chip prices that could pressure future device pricing.
Apple said its fourth-quarter inventory rose to $14.54 billion, up 31.1% from the prior quarter and 154.3% year over year. The increase was driven largely by stockpiling of computer memory amid rising component costs.
The company forecast a gross margin of 45%-46% for the December quarter, attributing the lower end of the range to higher memory prices. Apple posted a 47.9% gross margin for the September quarter.
“What we’re seeing with memory pricing right now is unprecedented,” CEO John Ternus told analysts. He added that the firm expects “even higher memory costs” in the December quarter, partially offset by price hikes introduced earlier in the year on Macs, iPads and iPhones.
Ternus noted that the benefit of carrying inventory will diminish over time, even as Apple’s purchase commitments for memory rose by $33 billion from June to the September quarter. COO Sabih Khan, who oversees the supply chain, confirmed the larger purchase obligations but did not rule out further device price increases.
Apple also cited supply constraints as a factor in weaker iPad sales, with iPad revenue falling to $6.2 billion, missing analysts’ $6.7 billion estimate and down 10% from the prior year, while iPhone and Mac sales exceeded expectations.