Apple provided a revenue growth forecast of 7% to 10% for the holiday quarter, beating analyst estimates of 6%. While demand for Mac and iPad has exceeded expectations, the company warned that supply for those products will be constrained by the availability of memory chips during the December period.
The procurement challenge has forced Apple to increase its manufacturing purchase obligations by $33B between June and September to secure components. This rising cost is expected to press gross margins to between 45% and 46%, down from 47.9% in the September quarter. The margin decline is primarily attributed to the loss of tariff refunds and what the CEO called “unprecedented” memory pricing.
The supply bottleneck has shifted as Apple transitioned more products to 2-nanometer chip technology, which reduced constraints on the advanced-node SoCs that limited production in previous months. Despite the memory shortage, Apple’s Mac segment grew 24% year over year to $10.8B in the September quarter, while rival Intel saw its client revenue fall 9% quarter over quarter.