**Apple Faces Memory Price Surge Amid Leadership Transition**
Apple (NASDAQ: AAPL) announced significant challenges related to memory prices during Tim Cook’s last earnings call before handing over the CEO role to John Ternus. Cook described the current state of the memory market as a “100-year flood,” with prices soaring by 90% in the first quarter of 2026, driven by high demand from tech companies. To address these rising costs, Apple raised prices for various devices in June, and further increases of $100 or more on iPhone models are anticipated when new devices launch next month.
Despite a robust current gross margin of 50%, Apple projects a decline to between 47% and 48% for the fourth quarter, with iPhone sales growth expected to slow to the “mid-teens” percentage, down from 22% in the previous quarter. This adjustment reflects concerns about securing adequate memory supply, which could impact future sales. Analysts suggest that the memory shortage may persist until late next year, but a recovery in smartphone demand is projected for 2028. Shareholders are advised to monitor how the company navigates these challenges under Ternus’s leadership.
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