Apple's Q4 2026 gross margin fell to 47.9%, with product gross margin dropping to 37.2%, down from 50.1% and 40.1% respectively in the prior quarter. Despite record September quarter revenue of $114.5 billion, rising memory costs drove a 2.2-percentage-point decline in company-wide gross margin and a 2.9-percentage-point drop in product gross margin. CFO Kevan Parekh noted tariff refunds provided roughly a one-percentage-point benefit, but without them margins would have fallen about one point sequentially due to higher memory costs.
Apple forecasts Q1 2027 gross margins between 45% and 46%, citing continued memory cost pressure and the Siri AI rollout. Parekh explained Siri AI will increase cloud costs and require deferring a portion of device revenue over the product's life, consistent with accounting for Maps, Siri, and iCloud. CEO John Ternus called current memory pricing "unprecedented" and expects costs to keep rising beyond the December quarter. Recent price increases across Mac, iPad, and iPhone lineups will help offset some costs, though lower-cost inventory benefits will diminish over time.
Source: 9to5Mac · Summarized by HeadlinesBriefing