Apple Reports $89.7 Billion in Manufacturing Purchase Commitments as Memory Costs Rise
Key Facts
Apple disclosed manufacturing purchase commitments of $89.7 billion as of September 26, 2026, reflecting the scale of its expected component and manufacturing needs amid supply and demand imbalances in memory and storage. In its annual report filed with the U.S. Securities and Exchange Commission, the company said $82.7 billion of these commitments are due within 12 months. The commitments cover the components and manufacturing the company expects to need, and do not represent cash spending that has been fully made. The chief executive said the increase from the June quarter to the September quarter was part of efforts to secure supplies, while the company warned that memory chip costs would continue to rise. That puts supply arrangements at the heart of Apple's outlook for the important quarter that includes the holiday season.
The commitments are consistent with Apple's warning of mounting pressure on memory as the industry faces supply and demand imbalances in components. In its annual report, the company said these imbalances, including those involving memory and storage, could lead to supply constraints and higher costs. Reuters reported that Apple had taken steps to secure memory volumes in advance, while expecting chip prices to continue rising. These steps matter given that device production depends on component availability, and commitments to supply precede receipt of the components or payment of their full value. The company said manufacturing commitments cover its expected component and production needs, making them an indicator of the scale of demand it is preparing to meet.
In the September quarter, Apple's gross margin was 47.9%, including a positive impact of about one percentage point from tariff refunds. The chief financial officer said the sequential change in margin, excluding the impact of tariffs in both quarters, was about one percentage point, which he attributed to memory. This comparison shows that component costs were already affecting the margin trajectory, even as tariff refunds supported the reported figure for the quarter. For the December quarter, Apple expects gross margin of between 45% and 46%. The Associated Press attributed this guidance to higher memory costs and expenses related to the launch of Siri AI, putting cost pressures up against the coming sales season.
The margin warning followed a strong revenue quarter, with Apple reporting revenue of $114.5 billion, up 12% year over year, for the quarter ended September 26, 2026. Diluted earnings per share were $2.10, up 14% year over year, and included a positive contribution of $0.05 per share from tariff refunds. The company said iPhone revenue set a September-quarter record, while services revenue reached an all-time high. The results highlight the breadth of business activity during the same period that memory costs are set to rise. Investors are therefore focused on the company's ability to protect margins while sustaining revenue momentum in the December quarter.
Apple shares fell during its earnings call on November 2 after executives presented their outlook for the next quarter, dropping 4% during the call before paring losses to 2%, according to Reuters. The Associated Press reported that the stock fell 2.6% to $329.60 during the call, after closing down 1.8% at $338.32 in regular trading that day. The company also forecast services revenue growth of between 8% and 9% in the December quarter, below analysts' estimate of 10.7%, Reuters reported. These indicators put the company's margin and services growth guidance in the context of the market's reaction to the outlook, alongside strong quarterly results. Apple said a webcast replay of the call would remain available for about two weeks after it aired on November 2.