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Apple’s results signal supply constraints risk for global tech

ADMIN || 30th January 2026

Apple is a victim of its own success. A record quarter for iPhone sales meant it needed more memory chips than expected, and supplies are running dry. That’s likely to lead to higher costs and lower margins for Apple and its peers in the tech appliance industry and will limit the relief for tech stocks, which had one of the worst days of the year on Thursday. On the other hand, it will continue to support the likes of Sandisk, Micron, Kioxia, Samsung and SK Hynix.

Apple shares gained after the company’s results, but not by very much. Earnings per share was 6% higher than expected. The company reported record revenue and guided for a 13%-16% year-on-year growth for the quarter ending in March but signalled growing constraints in the supply chain for Nand flash memory. That’s going to be bad news for companies like Dell, HP, Xiaomi, Lenovo and other device makers that also use the chips. It’s likely to continue to weigh on Apple’s stock, too.

Increased demand for high-value chips for AI from the likes of Nvidia has squeezed capacity for producing cheaper memory chips. That’s pushing up prices. So far, the lack of availability of memory chips has had a minimal impact on Apple, but it will have more of an effect in the current quarter and there’s a risk it will grow significantly, CEO Tim Cook said. Gross margin was 48%, and operating margin was 35%. Ironically, because Apple is selling so many iPhones, that’s also running down its inventory of raw materials and may stress its supply chain.

“The demand for iPhone was simply staggering,” Cook told the call.

Revenue from iPhone sales rose 23% year-on-year, beating consensus forecasts by 8.9%. Greater China grew 38% year-on-year, thanks to iPhone sales, and came in 17% higher than analyst forecasts. Chinese customers are particularly enthusiastic about the iPhone 17, Cook said.

That increase in sales which was much more than the company’s internal estimates is putting strain on its supply chain, Cook said. Inventories fell 15% from a year earlier to $5.9 billion, compared to a consensus estimate of $7.2 billion.

“We’re currently constrained, and it’s difficult to say when supply and demand will balance,” Cook said. “We exited the December quarter with very lean channel inventory due to that staggering level of demand.”

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