Apple CEO Tim Cook warns of extended memory crunch. 'We'll look at a range of options'
Apple CEO Tim Cook warned of an extended memory supply crunch, prompting the company to consider various strategic options. Analysts suggest Apple could adjust product memory, raise prices selectively, or absorb higher costs. Despite the challenges, Apple's strong financial position and scale may allow it to maintain profitability and potentially gain market share.
- ▪Tim Cook stated Apple will consider a range of options to address ongoing memory supply constraints.
- ▪Analysts suggest Apple could reduce memory in devices, increase prices on Pro models, or absorb higher costs to maintain margins.
- ▪Apple's revenue forecast of 14% to 17% growth exceeded expectations, leading to a positive market reaction.
- ▪Some analysts believe the memory crunch could help Apple gain market share as competitors face steeper challenges.
- ▪Apple's scale and financial strength are seen as key advantages in navigating supply chain pressures.
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William Kerwin, an analyst at Morningstar, told CNBC in an email that one option for Apple would be to enter into longer-term supply agreements to secure more favorable pricing. He noted that memory maker Sandisk discussed "numerous new agreements just like this" in its earnings call on Thursday. Needham analyst Laura Martin said that while she doesn't know what Cook was referring to in suggesting the company would consider options, it's not great to see capacity constraints "for a company with a core competence in hardware."Wall Street took the news in stride, reacting positively to Apple's forecast for revenue growth this quarter of 14% to 17%, and sending the stock higher. Analysts were expecting growth of 9.5% to $103 billion, according to LSEG.Gil Luria, an analyst at D.A.
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