Apple Maintains High Storage Markups Amid Rising Memory Costs

Apple Inc. reported fourth-quarter revenue of $114.5 billion with a gross margin of 47.9%, but executives warned of upcoming pressure on profitability. Chief Financial Officer Kevan Parekh stated that the ramp of Siri AI and higher memory costs are expected to reduce December quarter gross margins to between 45% and 46%.

CEO John Ternus described current memory pricing as unprecedented and noted that the company has already begun passing these costs to consumers through price increases on select iPad and MacBook models.

Despite these claims of squeezed margins, an analysis by The Wall Street Journal found that Apple continues to apply significant markups on iPhone storage upgrades. For the iPhone 18 Pro, the upgrade from 256GB to 1TB costs consumers $600, while the estimated direct cost to Apple is $192. This follows a similar trend with the iPhone 17 Pro, where the same upgrade cost $400 against an estimated cost of $42.