San Francisco, CA – May 1, 2026 – Apple reported its best March quarter ever on Thursday, with revenue hitting $111.2 billion. The milestone came as CEO Tim Cook announced his departure, handing the reins to hardware chief John Ternus.
Revenue grew by double digits across every geographic segment. iPhone sales set a new March quarter record, fueled by strong demand for the iPhone 17 lineup. But Cook also warned of rising costs tied to memory chip shortages.
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“Today Apple is proud to report our best March quarter ever,” Cook said during the earnings call. “iPhone achieved a March quarter revenue record, fueled by such extraordinary demand for the iPhone 17 lineup.”
Memory Chip Costs Rising
Apple spent more on memory chips in the March quarter than in previous periods. The company offset those costs by selling stockpiled inventory. But Cook cautioned that the trend will not last.
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“We expect significantly higher memory costs in June and beyond,” he said. Those increases “may drive an increasing impact” on Apple’s business.
The memory chip shortage stems from what industry insiders call “RAMaggedon.” The AI industry has been consuming memory chips at an rare rate, creating supply constraints. That drives up hardware costs across the board.
Apple is primarily a hardware company. Rising component costs hit its core products directly. RAM costs have reportedly quadrupled in recent months, affecting iPhone production expenses.
“There’s just a little less flexibility in the supply chain at the moment for getting more parts,” Cook told Reuters on Thursday.
New CEO Faces Challenges
John Ternus, Apple’s senior vice president of hardware engineering, will become CEO on September 1. He praised Cook during the earnings call.
“In my view, Tim is one of the greatest business leaders of all time,” Ternus said. “Stepping into the role of CEO is an incredible honor, and it means a great deal to me to have Tim’s trust and confidence.”
Industry watchers note that Ternus inherits a company at a strong financial position but with headwinds. The memory chip shortage could force Apple to raise iPhone prices. That would test consumer demand in a competitive market.
Cook will remain involved as executive chairman. His supply chain expertise could prove valuable as Apple navigates the chip shortage.
What This Means for Investors
The record quarter shows Apple’s core business remains healthy. The iPhone 17 lineup has strong momentum. Services revenue also continues to grow.
But the chip shortage presents a near-term risk. If Apple raises prices, it could slow iPhone sales. If it absorbs the costs, margins will shrink.
The implication is that Apple’s next few quarters may show lower profitability despite strong revenue. Investors will watch the June quarter results closely for signs of margin pressure.
For more details, see Apple’s official earnings release and Reuters’ coverage of the earnings call.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
