According to the financial report released by the company on Monday, Apple continued to build up inventory in the fourth fiscal quarter, especially computer memory.

The company disclosed that inventory increased significantly this quarter, rising from $11.09 billion in the third fiscal quarter to $14.54 billion in the fourth fiscal quarter, an increase of 31.1%. On an annual basis, inventory has grown by 154.3% compared to $5.72 billion in the fourth fiscal quarter of 2025.

Apple expects its gross margin for the December quarter to be between 45% and 46%, mainly due to higher memory costs. The company reported a gross margin of 47.9% for the September quarter.

Apple CEO John Ternus ( John Ternus ) said to analysts during a teleconference, "The memory pricing we are seeing now is unprecedented."

"As we mentioned earlier in the September quarter, compared to the June quarter, we indeed saw higher memory costs, which were offset by the benefits of inventory carryover and a decrease in the costs of certain non-memory components."

He stated that the company expects "memory costs to be even higher" in the December quarter, however, this impact will be partially offset by price increases implemented earlier this year for certain devices, including those on June 30th for Mac and iPad, as well as in September for iPhone.

Tenuis also said that after December, Apple expects memory costs to "continue to rise."

"As we previously mentioned, over time, we indeed believe that the benefits brought by carrying over inventory will gradually diminish," he stated, and added that the company is increasing its procurement of such key components. "As we strive to improve supply, our manufacturing and procurement commitments have increased by $33 billion from the June quarter to the September quarter, which you will see in the annual report to be released tomorrow."

Apple also involved its Chief Operating Officer, Sabih Khan ( Sabih Khan ), in the teleconference to address concerns regarding memory. He reiterated the company's commitment to increase procurement, but did not rule out the possibility of raising prices for Apple devices in the future.

The company also attributed the weak sales this quarter for iPad to limited supply. Although the sales of iPhone and Mac exceeded expectations, iPad was one of the few product lines that did not experience growth. iPad had revenue of $6.2 billion, which was lower than the analysts' forecast of $6.7 billion and also a 10% decrease compared to the same period last year.