Apple warns of memory chip shortage for key devices

Apple has warned it is seeking alternative memory chip suppliers as "very significant" constraints threaten future sales of its key devices.

Shares in the world's most valuable listed company fell by more than 5% in US after-hours trading last night when the maker of the iPhone, MacBook and iPad's forecasts for revenue growth came in weaker than expected.

Chief executive Tim Cook admitted that well publicised bottlenecks in advanced chips meant it was struggling to get the parts needed to deliver products.

"We're seeing some very significant (supply) constraints currently with limited flexibility in the supply chain to remedy it," he told a call with analysts.

Money latest: An airline's plea to PM that could make flights cheaper

Apple expected revenue growth of 9% to 11% in the current quarter, compared with a year earlier.

That was less than the 12% ‌rise predicted by Wall Street, according to London Stock Exchange Group data.

iPhone sales revenue was expected to grow at a mid-teens rate, compared with the market's target of 17.6%.

Apple and the technology industry generally have been scrambling to meet demand for new products, especially those with high-end processors and memory.

In an interview with the Reuters news agency, Cook ​said the main supply constraint was an industry shortage of advanced chipmaking technology used to produce the Apple silicon chips at the heart of its devices, particularly for the Mac lineup.

"If you look at the root ​causes... it's that we're having an incredibly strong product cycle beyond our expectations, and the (advanced chipmaking) supply chain just fundamentally has less flexibility in it to ⁠meet the high levels of demand," he said.

Apple's latest results largely met expectations, including a 21.7% hike in iPhone sales to $54.3bn (£40.3bn) between April and June.

That amounted to a new record for the company's third quarter.

Analysts largely expect Apple to raise its iPhone prices in the months ahead, citing pressures from the chip shortage.

Macs and iPads have already seen increases.

The price rises are worrying some market commentators, while investors are also preparing for a change of leadership.

It was Cook's final earnings appearance before his retirement after 15 years at the helm of the company.

John Ternus, Apple's head of hardware engineering, will assume the CEO role on 1 September.

Apple, which recently topped Nvidia as the most valuable listed company, has been largely spared the volatility in share price seen by chipmakers and big spenders on artificial intelligence.

Apple continues to generate cash without the huge investment spending that its Wall St peers are dealing with "and that showed across most parts of the operation," said Thomas Monteiro, an analyst at Investing.com.

"As the market grows more worried about free cash flow trajectories elsewhere in Big Tech, Apple keeps standing out as the safe haven in the storm," he concluded.

(c) Sky News 2026: Apple warns of memory chip shortage for key devices