Apple posts record sales as Tim Cook warns chip shortage may hit iPhone costs

Apple posted record quarterly revenue on Thursday, but outgoing chief executive Tim Cook warned that soaring memory chip costs could cloud the company’s near-term outlook as the AI hardware race tightens global supply.

Apple reported $111.2 billion in revenue for the March quarter, its strongest ever for the period, with double-digit growth across all geographic markets.

Cook said demand for the iPhone 17 helped drive a March quarter record for iPhone sales, extending the tech giant’s momentum ahead of a major leadership transition.

However, Cook told investors that Apple paid substantially more for memory chips during the quarter and expects “significantly higher” costs in June and beyond as AI companies consume huge volumes of high-bandwidth memory, worsening a global supply crunch often dubbed “RAMageddon.”

The shortage is raising component prices across the electronics industry and threatening margins for hardware manufacturers heavily dependent on advanced chips.

The warning comes as John Ternus prepares to take over as CEO on September 1, with Cook shifting to executive chairman.

Analysts say persistent memory inflation could force Apple to absorb higher production costs or pass some of the burden on to consumers through future iPhone price increases.

Despite the pressure, Ternus praised Cook on the earnings call, calling the leadership handover “an incredible honor” at a pivotal time for the company.