Apple slides 6% on Mac, iPad price hikes as memory costs bite

Apple shares dropped 6% Friday after the company disclosed sweeping price increases across its Mac and iPad lineup, blaming a sharp run-up in memory-chip costs that is squeezing margins in its hardware business.

The iPhone maker said during its quarterly earnings call Thursday that prices for MacBook Pro, iMac, and iPad Pro models would rise by an average of 8-10% globally, with some configurations jumping as much as 15%. The move follows a 30% surge in DRAM and NAND flash prices over the past six months, driven by supply constraints in the memory market.

"We're seeing cost pressure across the board on memory," Apple CFO Luca Maestri told analysts. "Our teams have worked to offset some of that through efficiency, but the magnitude this quarter exceeded what we could absorb."

The price hikes apply immediately to new orders. Existing retail inventory will be sold at previous prices.

Analysts said the increases could test consumer demand at a time when Apple's core hardware revenue faces tougher comparisons. The company reported revenue for its fiscal fourth quarter of $89.5 billion, slightly above consensus, but iPhone sales came in at $43.8 billion, roughly flat year-over-year. Services revenue rose 12% to $24.9 billion, continuing its role as the primary growth driver.

Mac revenue fell 8% year-over-year to $7.7 billion, a steeper decline than the 5% drop analysts had projected. iPad revenue was down 9% to $6.4 billion, versus expectations of a 6% decline. Apple pointed to the memory-cost headwind as the main factor in both categories.

Memory-chip costs have accelerated as suppliers including Samsung Electronics and SK Hynix shift capacity toward high-bandwidth memory for AI data centers, leaving less supply for commodity DRAM and NAND. The tightness is expected to persist into early next year, according to industry estimates.

"If memory prices stay at these levels through the March quarter, Apple will face a choice between further price increases or accepting margin compression on the hardware side," said Amit Daryanani, an analyst at Evercore ISI.

Apple's gross margin for the quarter was 46.2%, down 70 basis points from the prior quarter and slightly below the 46.5% consensus. Maestri declined to provide formal guidance for the current quarter, a common practice for Apple, but flagged that memory costs would remain elevated.

The broader market impact was visible across hardware stocks. Dell and HP fell 2% and 1.5%, respectively, in sympathy, as investors worried about similar cost pressure across the PC supply chain. Micron Technology, a major memory supplier, was up 3% as the price outlook supported its own margins.

Some investors saw the selloff in Apple as overdone. Apple's services business now accounts for nearly 28% of total revenue, up from 22% two years ago, and generates higher margins than hardware. The stock trades at roughly 28 times trailing earnings, a premium to the S&P 500 but below its five-year average of 32 times.

"The market is pricing in a demand hit that we may not see," said the analyst at Evercore ISI. "Services momentum and the upcoming iPhone 17 cycle offer a cushion."

Tim Cook, in his final earnings call as CEO before handing the role to Maestri in 2026, struck a steady tone. "We've navigated cost cycles before," Cook said. "The product lineup has never been stronger, and the ecosystem has never been stickier."

Apple shares closed at $225.67, their lowest level in three weeks. The stock is up 11% this year, trailing the Nasdaq 100's 16% gain.

A decision on whether to raise prices further will likely come when Apple reports holiday-quarter results in January, Maestri said. Memory-chip futures suggest another 5-8% increase in DRAM prices by that point.

– CNBC's Kif Leswing contributed to this report.