Apple warns memory prices and Siri AI costs will cut its margin

Nov 3, 2026
Apple expects higher memory prices and Siri AI cloud costs to pull its December quarter gross margin down to 45% to 46%, after record September quarter revenue of $114.5 billion.

Apple Inc. expects cloud costs from Siri AI and higher memory prices to affect its December quarter gross margin, according to an earnings call transcript published by The Motley Fool. The company forecasts a gross margin of 45% to 46%, with most of the sequential decline attributed to memory costs. "What we're seeing with memory pricing right now is unprecedented," CEO John Ternus said, adding that memory prices keep rising beyond December.

Apple will record Siri AI cloud expenses through services cost of sales as it expands access to more customers. It will also defer part of the revenue from devices that include Siri AI and recognize that revenue over each device's life.

Apple reported September quarter revenue of $114.5 billion, up 12% from a year earlier. Services revenue rose 10% to $31.6 billion, while net income reached $30.7 billion. The company expects December quarter revenue to grow 7% to 10% from a year earlier.

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