Apple reported fourth-quarter revenue of $114.48 billion, beating market expectations, yet company executives warned of a tougher upcoming quarter. During his first earnings call as chief executive officer, John Ternus cautioned that Apple faces unprecedented pressures from escalating memory chip costs. This ongoing global supply crunch stems largely from chipmakers shifting finite production capacity toward AI data centers to satisfy soaring demand.
Consumer electronics manufacturers have borne the brunt of this lopsided supply squeeze, with component shortages forcing previous price hikes on Macs, iPads, and September's iPhone lineup. Ternus noted that while carry-in inventory and cheaper non-memory components will slightly cushion the blow, memory purchase prices will continue climbing through the December quarter and beyond.
Beyond hardware component costs, Apple chief financial officer Kevan Parekh pointed to the financial weight of scaling Siri AI. Following its July debut, the associated cloud costs required to roll out the updated assistant to a broader user base will impact gross margins. Despite investor jitters surrounding the broader AI infrastructure spending cycle, Apple executives remain committed to funding these capabilities as long-term drivers for hardware upgrades and third-party app partnerships.
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