The news
Apple’s commitments to buy parts and assembly from its suppliers rose $33 billion in three months, to $89.7 billion at the end of September. Apple expects memory costs to keep rising past December.
Apple has $7 billion of those commitments due more than a year out, up from $0.8 billion in June.
“What we’re seeing with memory pricing right now is unprecedented,” said John Ternus, Apple’s CEO, on the earnings call.
The details
The $33 billion increase is more than double what Apple added in the same three months last year. Its total commitments also surpassed the company’s previous September 2022 high.
Apple added $12.1 billion in commitments between June and September 2025.
Commitments doubled from $44.6 billion in March 2026.
The September total exceeded the $71.1 billion reported in September 2022, the previous high among the four September filings before 2026.
The commitments also extend further into the future than Apple’s typical purchasing horizon. Its 2025 annual filing describes these obligations as typically covering up to 150 days. This year’s filing drops that line.
A year earlier, just $0.8 billion was due beyond 12 months.
Even at the 2022 high, only $2.7 billion ran past a year.
Apple disclosed the $33 billion figure after an analyst asked whether it was signing long-term agreements with memory suppliers.
Apple is also holding more components in inventory to cushion the impact of rising costs. That stock has softened Apple’s memory costs, a benefit Apple said will shrink over time.
Component inventory reached $10.4 billion in September, up from $2.1 billion a year earlier.
Total inventory, including finished products, reached $14.5 billion, up 154% year over year.
Apple expects memory availability to limit Mac and iPad supply in the December quarter. Memory costs are also expected to weigh on margins.
“We expect constraints on Mac and iPad, primarily driven by memory as demand has been higher than what we expected,” said COO Sabih Khan.
Apple forecast a gross margin of 45% to 46% for the December quarter, down from 47.9% in September. The September figure included about a percentage point of benefit from tariff refunds.
Apple said higher memory costs would drive most of the drop.
The company raised Mac and iPad prices at the end of June and iPhone prices in September.
Worth noting
Apple’s filing also spells out the risk of buying this far ahead. The annual report says Apple may “not fully utilize purchase commitments” if demand or production needs change. The company sets aside reserves for cancellation fees on excess orders. The same filing warns that supply constraints and rising costs for memory and storage components are expected to intensify.
What peers are doing
HP Inc is selling fewer PCs at higher prices as memory costs rise. HP said in February it was securing long-term agreements to cover its fiscal 2026 memory needs. It expected memory and storage to make up about 35% of a PC’s bill of materials that year. In its latest quarter, HP’s PC shipments fell 16% while its PC revenue rose 18%.
What’s next
Apple gave no outlook beyond the December quarter. Its next filing should offer a clearer picture of whether the larger commitments are translating into better component availability.
(Photo: Unsplash)
