Apple Expects Memory Shortages to Limit Mac and iPad Holiday Supply

Apple expects memory supply to constrain Mac and iPad availability during the holiday quarter after demand exceeded its expectations, Chief Operating Officer Sabih Khan said on the company's Q4 earnings call on November 2.

The bottleneck is changing. September-quarter shortages affecting iPhone, Mac, and iPad were primarily tied to the advanced manufacturing processes used for Apple's chips. Those constraints are easing as more of the lineup moves to 2-nanometer technology, but memory is expected to limit Mac and iPad supply in the December quarter. Khan did not provide a supply outlook beyond that period.

Memory is also becoming more expensive. "What we're seeing with memory pricing right now is unprecedented," CEO John Ternus said. Purchase prices are expected to rise further in December and continue increasing beyond the quarter, while the benefit of previously purchased, lower-cost inventory diminishes.

Price increases already made on Mac and iPad at the end of June, and on iPhone in September, are providing some offset, alongside lower costs for certain other components. The comments build on Apple's earlier warning about rising memory costs; the company did not announce another round of price increases on this call.

Ternus also disclosed that manufacturing purchase obligations increased by $33 billion from June to September as Apple worked to improve supply. That figure covers manufacturing commitments, not just memory purchases, and is due to appear in the annual filing on November 3.

CFO Kevan Parekh forecast December-quarter gross margin of 45% to 46%, primarily reflecting higher memory costs, with additional costs from the Siri AI rollout. Revenue is expected to grow 7% to 10% year over year, an outlook that incorporates constrained supply.

Separately, the supply-constrained iPhone Duo still has no forecast for when supply will catch up with demand. Khan said its production ramp is going well, but did not identify a specific component bottleneck for the foldable.