Tim Cook is sounding the alarm—and Apple's wallet is taking the hit. According to TechCrunch, the outgoing Apple CEO is bracing for what he calls a "hundred-year flood" in memory pricing. Apple has nearly doubled its inventory to $11.1 billion (up from $5.7 billion last September).
Apple just reported its "strongest June quarter ever," with iPhone sales up 22% and Mac sales surging 29% year-over-year. Cook is not celebrating. He is warning investors that supply chain pressures are intensifying. "We continue to expect high levels of demand. However, with less flexibility in supply chain, we expect the impact from the supply constraints to increase significantly," he said on the earnings call.
The generative AI arms race is the immediate cause. Every major tech player—from Meta to Microsoft to Samsung—is scrambling for advanced memory chips to power AI infrastructure. Apple is competing for the cutting-edge memory nodes for its A-Series and M-Series processors. Cook admitted the company is "going to be scrambling on the supply side, essentially."
This stockpiling move signals a fundamental shift: Apple's just-in-time supply chain philosophy is no longer viable. For decades, Cook perfected the strategy of keeping minimal inventory on hand. That approach made Apple lean and efficient. But when tomorrow's supply is uncertain, you buy today. The company even raised prices on Macs and iPads to offset production costs.
Apple is projecting revenue growth of only 9-11% year-over-year for the next quarter, down from the 16% growth it maintained recently. Apple stock tanked 6% in after-hours trading. The market is reacting to what appears to be a structural problem, not a temporary quarterly dip.
Senior VP John Ternus takes over as CEO in September. Cook is handing him a company facing its most serious supply crisis in years, as AI demand continues to escalate. Whether Ternus can manage this transition remains uncertain.
