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Business·2 min read

Apple CEO Ternus Warns Memory Shortages Will Last Into 2027

In his first earnings call as Apple CEO, John Ternus reported 12% revenue growth but warned that memory shortages and costs will persist into 2027.

Apple CEO John Ternus on stage presenting the company's quarterly results next to an iPhone and a Mac.
Image: CNET
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Apple CEO John Ternus used his first earnings call to report strong growth while warning that the chip and memory crunch is far from over. Revenue for the fourth quarter of fiscal 2026 rose 12% year over year, closing what Ternus called Apple's "best fiscal year ever" with $418 billion in revenue.

The results came despite what the company described as "unprecedented" supply chain constraints. Rising memory costs are limiting the availability of iPhone, iPad and Mac hardware, and Ternus cautioned that shortages could continue through next year. He did not rule out further price increases. Apple CTO Sadih Khan said memory and storage availability will increasingly cap supply of iPhones, iPads and Macs.

iPhone and services lead the way

The iPhone remained the main earner, with record quarterly revenue of $57.6 billion, driven by the iPhone 18 Pro and Pro Max and early buyers of the foldable iPhone Duo. Preorders for the foldable sold out within minutes last month, with wait times expected to reach January 2027. Services brought in $31.6 billion, and Ternus pointed to bundling Apple TV and Apple Arcade into iCloud Plus plans as a way to reach subscribers in more than 100 countries.

The Mac mini and Mac Studio have been hit especially hard, as AI data centers absorb components while hobbyists and developers buy the machines to run local AI agents. Apple previously offset some of the pressure with stockpiled parts and price increases for Mac and iPad in June and for iPhone in September.

AI as a future revenue stream

Executives described the Siri AI feature, currently in beta, as focused on request-based tasks and reliant on on-device processing for privacy. Ternus said Siri and Apple Intelligence can expand over time to more sophisticated capabilities that use cloud computing power, which Apple could eventually charge for.

For consumers, the message is that relief is not imminent. Memory costs and supply limits are expected to weigh on iPhones, iPads and Macs through the holidays and beyond, and more price hikes next year look likely.

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Tags:applejohn ternusearningsmemory shortageiphoneai

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