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An illuminated Apple logo is seen at a store in Munich, Germany, on April 2 (local time). / AP-Yonhap

Apple reported record revenue for the July–September quarter but warned that soaring memory chip prices could hurt its profitability during the year-end holiday quarter.

The company has partially offset rising costs by raising prices for key products, including iPhones, and securing component inventories. However, with memory prices expected to continue rising into next year, pressure on its profitability appears to be mounting.

According to Reuters on Nov. 2 (local time), Apple forecast a gross margin of 45% to 46% for the following quarter in its fiscal 2026 fourth-quarter (July–September) earnings report. This was lower than the 47.9% recorded in the fourth quarter. The company also projected services revenue growth of 8% to 9%, below market expectations of 10.7%.

Apple shares, which had been trading roughly flat immediately after the earnings release, fell as much as 4% in after-hours trading following management's cautious profitability outlook. The shares later pared their losses to around 2%.

The fourth-quarter results themselves exceeded market expectations. According to data compiled by the London Stock Exchange Group (LSEG), revenue reached $11.44 million (approximately 153.5 trillion won), surpassing the market estimate of $113.39 billion (approximately 152 trillion won). Earnings per share (EPS) came in at $2.10, above the forecast of $1.99, while net income rose year-on-year to $30.71 billion (approximately 41.18 trillion won).

iPhone revenue reached $57.58 billion (approximately 77.22 trillion won), exceeding market expectations on strong demand for the iPhone 18 Pro lineup and price increases. Mac revenue also performed well, reaching $10.79 billion (approximately 14.5 trillion won). In contrast, the iPad and Wearables, Home and Accessories segments fell short of market expectations.

Apple explained that it had secured component supplies in advance and adjusted its pricing policies to cope with rising component costs. Chief Operating Officer (COO) Sabih Khan said the company had increased its purchase commitments by $33 billion (approximately 44.24 trillion won) during the quarter through close cooperation with memory suppliers.

Apple added that it had partially offset rising costs by raising prices for the iPhone 17 and certain MacBook models alongside the launch of the iPhone 18 Pro.

Under CEO John Ternus, who took office in September, Apple is seeking to change its product launch strategy.

The company's first foldable phone, the iPhone Duo, experienced shortages immediately after its launch, while reports of display defects and supply constraints also emerged.

"The proportion of units returned due to display issues is extremely low, and we are replacing all affected devices," Ternus said.

"Supply is currently unable to keep up with demand, making it difficult to predict when supply and demand will reach a balance," he added.

                                                                                                           Lee Jeong-eun