Apple hits record sales as Tim Cook steps down – but chip shortages loom

apple informed record quarter on Thursday. Still outgoing CEO Tim Cook warned of some gathering storm clouds in the form of memory chip supply issues that could impact the business in the near future.

“Today, Apple is proud to report its best-ever March quarter with revenue of $111.2 billion and double-digit growth in every geographic segment,” Cook said during Thursday’s earnings call. “iPhone achieved record revenue in the March quarter, fueled by extraordinary demand for the iPhone 17 series.”

Cook said, less humorously, that Apple spent more on memory chips in March than in previous quarters, although the company’s spending was offset by its sales capacity. accumulated inventory. However, he warned that expectation June and beyond are “significantly higher storage costs” – which could have an “increasing impact” on the business.

Cook usually “referred to what is called”RAMageddon,” The AI ​​industry’s trend of stuffing memory chips with amazing gusto is causing shortages. It’s driving up hardware prices. Apple is primarily a hardware company, so this obviously isn’t great news for its core products.

Most importantly, the chip shortage affected the iPhone. Despite the strong sales figures put out by Apple on Thursday, it has reported earlier RAM costs have quadrupled – which has impacted phone manufacturing costs and put incoming Apple CEO John Ternus in a less than enviable position.

One possible outcome could be Apple Increases iPhone prices. “There’s a little less flexibility in the supply chain right now to get more parts” Cook told Reuters on Thursday.

Ternus, who served as Apple’s senior vice president of hardware engineering, was on Thursday’s earnings call and praised Cook. “In my opinion, Tim is one of the greatest business leaders of all time. It is an incredible honor to step into the role of CEO and it means a lot to me to have Tim’s trust and confidence,” said Ternus.

He’ll obviously have his work cut out for him when he starts on September 1st. But he’ll still have Cook’s supply chain expertise to lean on for a while. Cook will be executive chairman.