Apple Hits $111B Record on iPhone and MacBook Demand, Memory Costs Loom

Apple’s earnings came in stronger than expected this quarter. Apple Inc. reported $111.2 billion in revenue, but it is up 17% year-on-year. Growth was largely driven by steady iPhone 17 sales and strong demand for Macs. This comes even as supply constraints limited how much the company could ship. The results beat Wall Street estimates, but rising component costs are starting to come into focus.

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Cook Warns “Significantly Higher” Costs Beyond June as Ternus Takes CEO Sept 1

The company posted earnings per share of $2.01, ahead of expectations. Apple’s revenue growth was supported by iPhones. It generated about $57 billion, which is up 22% from a year earlier. Services also reached a record $30.98 billion. This further continues to support overall margins.

Tim Cook said iPhone 17 sales were stronger than expected, calling demand “off the charts.” He further added,

“The demand was off the charts. And there’s just a little less flexibility in the supply chain at the moment for getting more parts.”

But supply constraints around advanced chips limited how much Apple could deliver during the quarter. Most of this pressure is tied to production at TSMC. This is where demand for AI-related chips has tightened availability.

It should be noted that Mac sales also saw solid demand. This includes the new MacBook Neo, though supply shortages led to longer delivery times.

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Memory Costs Set to Rise as AI Demand Pressures Supply

Amidst this, Apple flagged rising costs as a key concern. Cook said the company expects “significantly higher” memory costs in the June quarter. He noted how there could be further impact in the months ahead. The increase is linked to the broader demand for memory driven by AI infrastructure. Cook revealed,

“We are investing a lot. We see it as a huge opportunity, both for consumer and for business. We’re all in, and personalized Siri is on schedule for this year.”

Despite these pressures, margins held up in the March quarter. It should be noted that gross margin reached 49.3%, supported by higher-margin services. Apple also announced a $100 billion share buyback. The stock rose about 3% in after-hours trading following the results.

Looking ahead, leadership changes are also in focus. Cook will step down on September 1, with Jogn Ternus set to take over. He steps in at a time when demand remains strong. But it is worth noting that cost pressures are expected to increase.

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