Apple Shares Drop 4% on Memory Cost Warning
Apple shares fell 4% on November 3 after CEO John Ternus said memory expenses are likely to rise further, increasing pressure on the company’s device margins. Apple reported a 47.9% gross margin for the September quarter and said it expects 45% to 46% in the December quarter. The company is using earlier-purchased inventory, expanding supplier commitments and raising some product prices to offset the cost increase.
Why it matters
Higher component costs create a direct risk to Apple’s profitability, while price increases could affect demand. AJ Bell’s Dan Coatsworth said the comments point to more expensive Apple products at a time when consumers are already facing elevated living costs.
Key facts
- 1Apple’s shares fell 4% after the company discussed increasing memory expenses. techeconomy.ng
- 2Gross margin was 47.9% in the September quarter, and Apple expects 45% to 46% for the December quarter. brandiconimage.com
- 3Manufacturing purchase obligations rose by $33 billion to $89.7 billion as of September 26. techeconomy.ng
- 4Apple’s market value was approximately $4.94 trillion before the decline, and the reported loss could exceed $170 billion if sustained. brandiconimage.com
Summary written by AlphAI AI Desk from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.