Apple's hardware inventories, particularly computer memory, witnessed a massive surge during the fourth quarter of the company's fiscal year, according to the financial results announced by the company. The financial data showed an increase in total inventory from $11.09 billion in the third quarter to $14.54 billion in the fourth quarter, recording a quarterly growth of 31.1%. On an annual basis, inventory more than doubled by 154.3% compared to its value of $5.72 billion in the fourth quarter of 2025.
The company attributed its expectation for a gross profit margin ranging between 45% and 46% during the last quarter of the year to the direct impact of rising memory chip costs, compared to a profit margin of 47.9% achieved by the company in the quarter ending in September.
Unprecedented Memory Pricing Crisis
In this context, Apple's CEO, John Ternus, stated to financial analysts that current memory price levels are historically unprecedented. He explained that the company faced higher costs compared to the previous fiscal quarter, part of which was offset thanks to carried inventory and the cost of some non-memory-related components.
Ternus confirmed that the company expects memory costs to continue escalating beyond December, pointing out that Apple relies partly on previous price increases for certain devices, such as Macs and iPads implemented in June, and iPhones in September, to limit the impact of these financial pressures.
Massive Purchase Commitments and Operational Impacts
In light of the company's efforts to secure supply chains and improve procurement operations, Apple revealed an increase in manufacturing purchase commitments by $33 billion during the fiscal quarter. For his part, supply chain operations manager Sabih Khan did not rule out the possibility of approving new device price increases in the future to face these challenges.
Regarding product sales, these supply constraints negatively affected the sales performance of iPad devices during the quarter, which came below analysts' expectations with revenues reaching $6.2 billion, down by 10% year-on-year, making it the only sector that did not achieve growth compared to iPhone and Mac sales that exceeded expectations.