Apple stockpiles inventory amid supply chain challenges
As the generative AI boom drives up demand for hardware components, Apple is facing significant memory pricing pressures and supply constraints. Despite reporting its strongest June quarter ever with strong iPhone and Mac sales growth of 22% and 29%, respectively, CEO Tim Cook warned that these issues are expected to worsen due to limited flexibility in the global supply chain. Apple has nearly doubled its inventory to $11.1 billion from last September’s $5.7 billion — a shift away from its historically lean approach under Cook. The company recently raised prices on Macs and iPads, following similar moves by Meta, Samsung, Microsoft, and Sony. These constraints are expected to impact Apple's upcoming quarter with revenue growth projected at 9%–11%, down from the previous ~16%. This has led to a post-earnings drop in Apple stock. Cook emphasized that securing advanced memory nodes for its custom silicon chips is a major challenge, and incoming CEO John Ternus will inherit these supply-side pressures. While other tech firms are also grappling with similar issues, investors remain concerned about the potential impact on growth.
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Topics: Apple earnings report generative AI hardware pricing memory shortages RAMageddon