As Apple reported a record June quarter with $109.4 billion in revenue today, Tim Cook discussed the ongoing and upcoming supply constraints during the company’s earnings call. Responding to a question during the Q&A session, he acknowledged that these constraints are expected to further weigh on the September quarter.
In the words of Tim Cook, “During the June quarter, we did experience Supply constraints primarily on the Mac into a lesser extent on iPhone and iPad. These were driven by very high levels of demand, and as we’ve said before, we are seeing less flexibility in the supply chain than normal. And the constraints were primarily driven by the availability of the advanced nodes that SOCs are produced on.
If you look forward to the current quarter, the September quarter, we continue to expect high levels of demand. However, with less flexibility in supply chain, we expect the impact from the supply constraints to increase significantly sequentially. The projected Supply constraints in the September quarters as Kevin said, affect iPhone, Mac, and iPad. And so we’re seeing some very significant constraints currently with limited flexibility in the in the supply chain to remedy it.”
Explaining the impact of memory shortages, he said,
“As I said on the last call, we paid more for memory in the March quarter than the December quarter. And then, as I’ve alluded to last quarter, we expected to pay significantly more in the June quarter than the March quarter, and that is what happened. It was partially offset by the benefit of carry-in inventory. For September, we expect to pay even higher memory costs, and we’re able to offset partly by a few factors…the first is, as you would expect, we have a benefit from some carry-in inventory in the September quarter. However. We believe we’ll see decreasing benefit from this over time beyond the September quarter. The second is, we’re expecting lower costs on certain non-memory components that are in our BOM. If you look beyond September, we see the market pricing for memory continuing to increase…”
Cook said that more DRAM suppliers would be good for the supply constraints; however, it is still unclear if that would benefit the pricing. These comments and the fact that memory prices are going to continue to increase suggest that the current increased prices for Macs and iPads may not revert back to the previous pricing even if the memory shortage eases.
Apple’s current CEO Tim Cook said, “Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment,” “At WWDC26, we were thrilled to introduce the all-new Siri AI, alongside all of Apple’s latest software innovations and important new child safety features.”
Kevin Parekh, Apple’s CFO, said that these supply constraints are expected to affect the iPhone, iPad, and Mac.
Due to the weak forecast, Apple shares fell sharply by around 8% in after-hours trading, and is currently at $312.33 (-6.33%) as of writing.
Despite these factors, Apple has recorded the best June quarter ever with 16% higher year-over-year revenue and $29.79 billion in net income. You can read all the details about today’s earnings report in our coverage from earlier today.
Tim Cook said, “Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment,”
The Earnings call went live on Apple’s website earlier today. Do you think Apple will have to raise prices further? What would be your approach to this shortage? Let us know down in the comments or tweet/post to us at @appleosophy! Be sure to download the Appleosophy App from the App Store or visit our website to stay updated with the latest Apple News!
