As Tim Cook steps down, Apple hits record sales, but chip shortage looms

Apple reported a record quarter on Thursday. Still Outgoing CEO Tim Cook warned of some 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 the best March quarter in our history, with revenue of $111.2 billion and double-digit growth across all geographic segments,” Cook said during Thursday’s earnings conference call. “iPhone achieved record revenue in the March quarter, driven by such extraordinary demand for the iPhone 17 line.”

Less optimistically, Cook reported that Apple spent more on memory chips in March than in previous quarters, although the company’s costs were offset by its ability to sell. stored inventory. But, he warned, the expectation There are “significantly higher memory costs” in June and beyond, which may “drive an increasing impact” on the business.

Cook was referring to what has commonly been called “RAMageddon“, the AI ​​industry’s tendency to consume memory chips with such amazing taste that it is causing shortages. This is driving up hardware prices. Apple is primarily a hardware company, so this is obviously not good news for its core products.

In particular, the chip shortage has affected the iPhone. Despite the strong sales figures touted by Apple on Thursday, it has been previously reported that RAM costs have quadrupled, impacting phone production costs and putting John Ternus, Apple’s incoming CEO, in an unenviable position.

One possible outcome may be that Apple increases iPhone prices. “Right now there is a little less flexibility in the supply chain 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. Taking on the role of CEO is an incredible honor and it means a lot to me to have Tim’s trust,” Ternus said.

Obviously, he’ll have his work cut out for him when he starts work on September 1. But he will still have Cook’s supply chain experience to fall back on for a while. Cook will become executive chairman.