Apple isn’t sure if it will have enough new iPhones for everyone

Record results in the shadow of the coming crisis

Apple described its latest earnings report as its “strongest June quarter ever,” with iPhone and Mac sales beating expectations, with growth of 22 percent and 29 percent year-over-year, respectively. Still, the company is preparing for a worsening memory shortage, a problem also known as “RAMageddon.” The biggest challenge for Apple is securing the advanced memory chips used in their “Apple Silicon” processors, the A-series and M-series drives found in iPhones and Macs. Cook warned that while demand remains high, supply chain problems are growing.

​- We continue to expect a high level of demand. However, with less flexibility in the supply chain, we expect the impact of supply constraints to significantly increase in the next quarter – said Cook during the presentation of the quarterly results.

​- We are currently facing some very significant constraints with limited flexibility in the supply chain to fix this.

For the coming quarters, Apple predicts revenue growth between nine and 11 percent on an annual basis. This is a significant drop compared to the last few quarters, in which the company maintained growth of around 16 percent. Such a forecast, of course, worried investors, as Apple shares fell six percent in after-hours trading, according to TechCrunch.

Change of strategy in response to the crisis

Apple is apparently worried enough about the shortage that it reported $11.1 billion worth of inventory, nearly double the $5.7 billion it reported last September. The move marks a departure from Cook’s long-standing supply chain management strategy, which has emphasized minimizing the inventory that Apple keeps on hand. Accumulation of inventory is a clear indication that the company is preparing for long-term disruptions in the market.

These limitations of the councilć have led to unpopular decisions. Cook added that Apple “reluctantly” raised the prices of Macs and iPads last month. Other companies, such as Meta, Samsung, Microsoft and Sony, were also forced to raise the prices of their hardware.

​- Essentially, we are going to fight on the procurement side – admitted Cook.

A global problem fueled by artificial intelligence

The problem facing Apple is not an isolated case. The entire technology industry is struggling to procure key components, especially high-end processors and memory. One of the main drivers of this crisis is the rapid growth of the artificial intelligence industry. Companies developing AI systems massively buy RAM and memory chips to build their data centers, which drastically reduces availability and increases prices for all other market participants. When senior vice president of hardware engineering John Ternus takes over as CEO in September, the company may be in for a tough time, but at least it’s not alone in its supply woes.