Apple's earnings were all about unprecedented memory costs

A constant issue throughout Apple's latest earnings call was the cost of memory. John Ternus warned several times that the company has only a few ways to minimize the impact for consumers.

Even as Apple reported better than expected results in its Q4 earnings call, both Ternus and Chief Financial Officer Kevan Parekh cautioned analysts about the problems of high memory prices.

"Let me give you an overall view on memory," John Ternus said. "What we're seeing with memory pricing right now is unprecedented. And as we said earlier in the September quarter, we did see higher memory costs as compared to the June quarter, which were partly offset by the benefit of carry-in inventory and lower costs on certain non-memory components."

Carry-in is when a company like Apple increases production to build up inventory ahead of price rises. Apple successfully did this when Trump's "reciprocal" tariffs were introduced, and Ternus is admitting that the firm is trying to continue the practice.

But there is a limit to how much can be physically produced. Ternus, and the rest of the industry, believes that price hikes by RAM suppliers are far from over.

What happens next

"Now, for the December quarter, we expect even higher memory costs, partly offset by a few factors," he sad. "So as you know, we changed the price on many of our products, including Mac and iPad at the end of June, and iPhone in September, and these pricing increases provided some offset."

He repeated that there would be some savings because of getting lower costs on other components. Plus there will still be some carry-in benefit even in December.

"Looking beyond the December quarter, we see the pricing for memory purchases continuing to increase," said Ternus. "As we said before, we do believe we'll see a decreasing benefit from the carry-in inventory on memory over time."

Alongside painting this picture for how Apple will be affected in the foreseeable future, Ternus and Parekh both repeatedly referred to the impact of memory costs on this quarter's results. Mostly, because the analysts on the call asked the same question over and over, just using different words.

But to at least try leaving the topic on a more positive point, Ternus said that he wanted to add what Apple is doing "as we work to improve supply." He said that building up US production was part of this, referring to Apple's American Manufacturing Program.

But, none of that spend is towards RAM and flash media.