Apple's hardware inventories, particularly computer memory, experienced a massive jump during the company's fourth fiscal quarter, according to earnings results announced by the company. Financial data showed that total inventory rose from $11.09 billion in the third quarter to $14.54 billion in the fourth quarter, registering a 31.1% growth on a quarterly basis. 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 forecast for a gross profit margin ranging between 45% and 46% during the final 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 CEO John Ternus told 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 certain non-memory-related components.
Ternus emphasized that the company expects memory costs to continue rising beyond December, pointing out that Apple relies partly on previous price increases for certain devices such as Mac and iPad devices implemented in June, and iPhone devices in September, to limit the impact of these financial pressures.
Huge purchasing commitments and operational impacts
Amid 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. Meanwhile, supply chain operations manager Sabih Khan did not rule out the possibility of enacting 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 in below analysts' expectations with revenues reaching $6.2 billion, down 10% year-on-year, making it the only sector that did not achieve growth compared to iPhone and Mac sales that exceeded expectations.