Background
During the fiscal Q1 2026 earnings call, Apple’s leadership acknowledged that a global memory shortage is beginning to weigh on the company’s profitability.
Impact on Margins
Tim Cook confirmed that memory price increases have already been factored into the guidance for fiscal Q2 2026. CFO Kevan Parekh reiterated an expected margin range of 48 %‑49 % for the quarter, down from the 48 % overall gross margin reported in Q1.
Apple’s Potential Levers
Cook said Apple will “look at a range of options” to mitigate the pressure, which could include:
- Adjusting product pricing for Macs and iPhones
- Negotiating long‑term supply contracts
- Exploring alternative memory suppliers or technologies
- Optimising product designs to use less memory
Fiscal Q1 2026 Highlights
Apple posted a 40.7 % gross margin on products, a 76.5 % margin on services, and a combined 48 % gross margin overall.
Outlook
Analysts expect the memory shortage to continue into Q2, potentially compressing margins unless Apple implements one or more of the above levers.
About the Author
Marcus Mendes is a Brazilian tech podcaster and journalist who has covered Apple since 2012.