Squeezed by elevated component pricing and cloud infrastructure fees, Apple expects its key holiday gross margins to drop to between 45 per cent and 46 per cent. Fourth-quarter revenue reached $114.48 billion, lifted by price hikes and early appetite for the iPhone 18 Pro lineup. To counter escalating server costs from running Siri AI on Google's cloud, the company plans to raise iCloud+ subscription prices and introduce usage limits on server-side features. Meanwhile, purchasing commitments surged by $33 billion as executives seek to secure vital inventory ahead of continued cost pressures next year.
Key points
Rising memory chip expenses and AI cloud operating costs are projected to compress Apple'…: Rising memory chip expenses and AI cloud operating costs are projected to compress Apple's profit margins through next year.
Chief Executive John Ternus is restructuring Apple's traditional autumn release cycle by…: Chief Executive John Ternus is restructuring Apple's traditional autumn release cycle by spacing out debuts of new hardware categories.
Severe supply constraints and sporadic display cracking issues are hampering the rollout…: Severe supply constraints and sporadic display cracking issues are hampering the rollout of the newly launched iPhone Duo foldable smartphone.
Sources checked by our analysis pipeline: 1
SAN FRANCISCO, Nov 2 : Apple warned on Monday that the cost of memory chips would continue to rise, pressuring gross margin for the crucial holiday quarter, but said it had taken steps to lock in supplies.
Shares, little changed in after-hours trading after fiscal fourth-quarter results beat expectations, fell 4 per cent during a conference call after executives outlined the weaker outlook, but later pared losses to a 2 per cent decline. Early demand for the iPhone 18 Pro lineup and higher prices boosted the quarter.
Apple said it expects gross margin of 45 per cent to 46 per cent in the quarter ending in December, down from 47.9 per cent in the fourth quarter. It forecast services revenue growth of 8 per cent to 9 per cent, below analysts' expectations of 10.7 per cent.
The results come as Apple experiments with a string of firsts under new CEO John Ternus, who took over in September. After nearly two decades of launching most new iPhones each autumn, Apple this year is spacing them out, with iPhone Pro and Duo…
Component makers and assemblers across the region are navigating sharply contrasting financial realities despite healthy consumer appetite for devices. While elevated device shipments provide a steady revenue baseline, surging input expenses for vital parts threaten to erode operating margins for select partners. This divergence illustrates how raw material inflation can disrupt the benefits of strong end-market demand.
Financial market tracking platform InvestingPro has officially rolled out its seasonal sales campaign ahead of the standard holiday shopping rush. Subscribers can access the service under steep promotional terms that represent the platform's most competitive rates throughout the entire annual calendar. This limited-time window provides significant cost reductions for prospective and returning users seeking premium financial tools.
Rapidly accelerating capital demands across the artificial intelligence space are set to drive fresh investment rounds across the broader technology landscape. Sustaining current advancements and operational scaling will require significant financial resources from global investment firms. Market participants are positioning for larger resource commitments as the industry continues to expand.