Apple warns: chip prices depress gross margin despite record sales

Apple has surprised investors with record revenue and significantly higher growth expectations than analysts had anticipated. Yet reluctance prevails on the stock market. Rising costs and delivery problems threaten to put a brake on the tech giant’s profit margin.

iPhone and China push sales to record levels

Apple posted revenues of $143.8 billion in the quarter ending in December. That is sixteen percent more than a year earlier and well above the $ 138.4 billion that analysts expected. The iPhone was again the main driver. Smartphone sales generated $85.3 billion, an increase of twenty-three percent.

CEO Tim Cook called it “the best iPhone quarter ever”. The iPhone 17 Pro models in particular were in demand worldwide. The growth in China was striking, where turnover increased by thirty-eight percent to $25.5 billion. Apple thus regained the top position in the smartphone market, at the expense of Samsung.

Higher chip prices and production problems are putting pressure on margins

Although Apple presented strong figures, there is also a warning. Costs are rising, mainly due to the rising prices of memory chips. While the impact of this was not too bad in the previous quarter, Apple now expects margins to come under palpable pressure. Import duties also influence the result. During the holiday season alone, this led to a financial setback of $1.4 billion.

In addition, Apple is experiencing delivery problems. The production of the new three nanometer chip, crucial for the iPhone, is proving difficult. There are also bottlenecks with the AirPods Pro 3 due to a shortage of parts.

Stock market reacts cautiously despite strong outlook

Apple expects revenue growth of thirteen to sixteen percent for the current quarter. That is well above the ten percent that Wall Street analysts had expected. Yet the stock market reaction remained tepid. In after-hours trading, the share rose by only half a percent.