Apple Faces Foldable iPhone Shortage Ahead of Christmas

Apple is struggling to replenish supplies of its newly launched foldable iPhone Duo ahead of the Christmas shopping season, with the company unable to predict when production will catch up with demand. The nearly $2,000 smartphone sold out just over a week after its launch, highlighting supply challenges for Apple's latest flagship device.

In its November 3, 2026, financial update, Apple acknowledged difficulties obtaining essential components and warned that shortages could continue affecting its product lineup. The company also faces rising memory chip prices as artificial intelligence companies expand their data center infrastructure.

Apple described the component shortages as constraints and acknowledged that balancing production with customer demand remained difficult.

It is "really hard to predict when supply and demand will be in balance," the company said.

The supply situation extends beyond the foldable smartphone. Chief Operating Officer Sabih Khan said most Apple devices were experiencing production limitations, partly because of difficulties securing advanced-node microprocessors.

Khan explained that the shortage could persist into next year, with iPads and Mac computers expected to face particular pressure. Apple manufactures many of these advanced chips through Taiwan-based TSMC.

Last week, Apple also announced that it would replace affected iPhone Duo handsets after a problem caused a limited number of devices to develop cracks along their inner folding displays.

Despite the production challenges, Chief Executive John Ternus expressed satisfaction with the initial customer response to the new smartphone.

"I am thrilled" by the early reaction to the foldable phone, Ternus said.

He added that rising memory expenses were creating another significant challenge for the company. The increase affects storage components that allow devices to retain applications, photographs, messages, and other information.

Ternus described the increase in memory costs as "unprecedented" as demand for data center capacity continues to expand alongside the artificial intelligence industry.

Meanwhile, Khan said Apple was working to accelerate deliveries of its newest foldable device.

"Into the hands of our customers as quickly as possible," Khan said, describing the company's efforts to distribute the iPhone Duo.

Apple's financial results for the three months ending September 26 did not include iPhone Duo sales because the device launched at the end of October.

Nevertheless, the company reported record annual global iPhone sales. Revenue from iPhones increased 17% to $57 billion during the quarter.

Mac revenue also delivered strong growth, climbing 27% to a record $10.7 billion. Apple's overall quarterly revenue increased from $102 billion to $114 billion, while pre-tax profit rose from $32.8 billion to $36.1 billion.

However, not every product category recorded growth. iPad sales declined 10%, while revenue from wearable products, including headphones and watches, fell 7%.

Memory costs have become an increasingly important concern as artificial intelligence platforms and chatbots drive greater demand for data center infrastructure. Companies including OpenAI and Anthropic have contributed to the expanding demand for computing resources and storage capacity.

Former Apple chief executive Tim Cook previously described the sudden increase in data center expenses as a "thousand year flood" when discussing the unexpected cost pressures facing the company.

Apple has also increased prices across nearly all its hardware products by approximately 20%, reflecting the broader cost pressures affecting its business.

Financial market observers nevertheless viewed the latest earnings performance positively. Sunil Krishnan of Aviva Investors told the BBC's Today programme that Apple had delivered "a reasonably solid set of results" and highlighted "a pretty good performance" from its iPhone division.

Krishnan also addressed concerns about Apple's profit margin outlook and increasing memory expenses, while noting the company's financial resilience.

"Margins well north of 45% for a very well-established company, I think, are pretty impressive," Krishnan said.

Despite the quarterly revenue and profit increases, Apple's shares declined 1.8% in after-hours trading following the financial announcement.