Apple says memory costs will keep rising and won't rule out new price hikes

Apple expects the cost of computer memory to keep rising, and it did not rule out raising prices again. On its earnings call, CEO John Ternus called current memory pricing "unprecedented." An analyst asked if prices could go up again. COO Sabih Khan, who took the question, did not give a direct answer.

What Apple said

Ternus said memory costs rose in the September quarter and the December quarter will be worse. He added that beyond December, Apple sees memory prices continuing to increase. Memory is the type of chip that lets a device handle many tasks at once.

Apple covered the September increase by using memory it had stockpiled at lower prices. It also got lower prices on some other parts. It expects those same factors, plus price increases on iPads, Macs and iPhones in June and September, to cover some of the December rise. CFO Kevan Parekh said the price increases were made "reluctantly."

The numbers

• Gross margin is expected to fall from 47.9 percent to 45 to 46 percent in the December quarter.
• Apple blames mostly higher memory costs, plus some Siri AI costs.
• Inventory more than doubled from a year ago to $14.5 billion.
• Purchase commitments to manufacturers rose by $33 billion from June to the September quarter.

Gross margin is the share of each sales dollar Apple keeps after the direct cost of making its products. A lower number means Apple is absorbing more of the cost itself.

Who it affects

Anyone shopping for a Mac, iPad or iPhone could feel this. Apple said Mac and iPad supplies will be tight in the December quarter because of memory shortages. That could mean some models are harder to find. Ternus also said the benefit from buying memory early will shrink over time, so the stockpile will not shield prices forever.

What is not known yet

Apple did not say whether it will raise prices again, or when. Parekh said the company is weighing short-term and long-term effects and believes it is balancing them well. More detail on Apple's purchase commitments is due in its annual filing, which Ternus said would come out the next day.