Apple faces iPhone pricing challenge, supply crunch as AI demand deepens global memory chip shortage

Core Viewpoint - Apple reported record first quarter results driven by unprecedented iPhone sales, leading to all-time high revenue, but faces challenges due to global memory chip shortages [1][5]. Financial Performance - Apple's Q1 sales reached $143.8 billion, surpassing Wall Street estimates of $138.4 billion, with iPhone sales contributing $85.3 billion [5]. - Revenue from iPhone grew 23% year-over-year, achieving record sales across all geographic segments [6]. Supply Chain Challenges - CEO Tim Cook indicated that the global memory chip shortage is impacting the company, with expectations of continued effects in the current quarter and beyond [2]. - The company is experiencing supply shortages of advanced processors for the iPhone 17, exacerbated by high demand for tech hardware driven by AI developments [3][4]. - Apple is in a "supply chase mode" to meet high customer demand due to low channel inventory at the end of the December quarter [4]. Memory Chip Market Dynamics - Memory chip prices are anticipated to rise significantly in the coming quarters, which may force Apple to either absorb the costs, affecting future margins, or increase iPhone prices [3]. - The tech industry's AI data center expansion is consuming large quantities of memory chips, creating scarcity that affects prices and availability for other tech companies, including Apple [7][9].