Apple addresses rising memory chip prices on earnings call

It was only yesterday when we reported that the rising cost of memory chips may put pressure on Apple, since Samsung and SK Hynix are increasing it. However, Apple CEO Tim Cook responded to that matter during the company’s latest earnings call with equity analysts.

Tim Cook's Response

Cook said that the surge in memory chip costs had only a minimal effect on Apple’s gross margin in the fourth quarter of its 2025 fiscal year, but he acknowledged that the current quarter may see a “bit more of an impact” as price pressures continue. Despite the rising costs for components crucial to devices like iPhones and Macs, Apple reported strong revenue results and remains confident in its financial outlook.

To the uninitiated, the memory chip market has experienced steep price increases in recent months, driven in part by tight supply and high demand from artificial intelligence infrastructure customers. These conditions have affected DRAM and NAND flash memory pricing across the industry, with analysts pointing out that memory shortages are being fuelled by intense demand from data centres and AI hardware.

Impact on Apple’s Margins and Product Pricing Strategy

Market observers and analysts expect continued memory price increases through 2026, with Apple negotiating memory pricing with suppliers on a quarterly basis to adapt to market shifts. Although higher memory costs are expected to put pressure on gross margins in upcoming quarters, Apple appears to be absorbing much of the increase rather than passing it directly to consumers.

Some analysts also suggest that Apple may look to maintain flat starting prices for upcoming products such as the iPhone 18, relying on its significant services revenue and strong brand positioning to offset cost pressures.

Broader Market and Investor Reactions

Investors have been closely watching how rising component costs may influence Apple’s profitability and stock performance. While Apple’s recent earnings beat expectations, some market participants remain cautious about the ongoing memory price environment and its effects on technology hardware margins. At the same time, strong sales of products like the iPhone 17 continue to drive revenue growth, reinforcing Apple’s resilience even as supply chain costs rise.

What Comes Next for Apple and Memory Costs

As Apple moves through 2026, its approach to managing memory price volatility will be critical for maintaining competitive pricing on key products and protecting profit margins. Continued negotiations with memory suppliers and strategic supply chain management could help Apple navigate these pressures better than many competitors.

The broader memory shortage and global demand dynamics also suggest that component cost pressure could remain a recurring theme for the tech industry well into the year. Stay tuned for more trending tech news at TechNave.com.