Apple’s inventory climbed to $14.54 billion in its fiscal fourth quarter, up 31.1% from $11.09 billion in the previous quarter and 154.3% from $5.72 billion a year earlier. The increase included stockpiling of computer memory, according to the company’s earnings report on Monday.
Apple expects a gross margin of 45% to 46% in the December quarter, compared with 47.9% in the September quarter. CEO John Ternus said higher memory prices were a major factor behind the outlook, describing current pricing as unprecedented. He expects memory costs to rise further in December and continue increasing beyond the quarter.
The company said price increases introduced earlier this year on some Mac and iPad models, followed by iPhone price increases in September, would partly offset the higher costs. Ternus also said Apple expects the benefit of using memory purchased earlier at lower prices to diminish over time as it increases component purchases.
Apple’s manufacturing purchase obligations rose by $33 billion between June and September, Ternus said. Chief Operating Officer Sabih Khan, who oversees supply chain and manufacturing, reiterated the increase on the earnings call but did not rule out further price increases for Apple devices.
Supply constraints also weighed on iPad sales. Revenue for the product line was $6.2 billion, below analysts’ expectations of $6.7 billion and down 10% from a year earlier. iPad was among the few Apple product segments that did not grow in the quarter, while iPhone and Mac sales exceeded estimates.
Sources: TechCrunch.