Apple's first foldable device has proven to be an immediate commercial success, but the company admits it remains uncertain when it will be able to stabilize inventory. Following its release toward the end of October, the high-end smartphone quickly sold out, leaving executives working to ramp up production amid persistent supply chain challenges.
The situation comes as Apple navigates broader component shortages and rising material costs, even as the company reports strong overall financial growth for the past year.
High Demand and Unclear Restock Timelines for the iPhone Duo
The iPhone Duo, which carries a starting price tag of $1,999 in the US and £1,999 in the UK, sold out rapidly following its release just over a week ago. Speaking during a financial results call with analysts on Monday, Apple's newly appointed Chief Operating Officer, Sabhi Kahn, addressed the shipping delays and tight availability.
"At this time, it's really hard to predict when supply and demand will be in balance," Kahn stated, noting that while the manufacturing ramp is moving forward, the company cannot yet project when more devices will be widely available.
John Ternus, who took over as Apple's chief executive from Tim Cook in September, expressed enthusiasm over the initial consumer response to the foldable handset. However, the launch has not been entirely without hurdles. Although executives did not bring up hardware defects during the financial call, Apple confirmed last week that it will replace devices affected by a defect that caused a small number of the new phones to crack along the inside fold.
Broader Supply Constraints and Rising Component Costs
The inventory bottleneck for the iPhone Duo matches ongoing difficulties across much of Apple's hardware lineup. Kahn explained that production for most Apple devices continues to face restraints due to shortages of microprocessors utilizing "advanced nodes." These crucial computer chips, largely manufactured by TSMC in Taiwan, enable devices to operate at high speeds. Apple warned that these constraints are likely to persist into next year, directly impacting products like iPads and Macs.
Compounding the hardware pressures, Apple is experiencing unprecedented cost increases for memory storage components used for apps, photos, and messages. This surge is driven largely by a data center boom fueled by the popularity of artificial intelligence platforms from companies like OpenAI and Anthropic. Former CEO Tim Cook previously described the sudden spike in data center expenses as a "thousand year flood," a factor that has contributed to Apple raising prices across its hardware portfolio by roughly 20%.
Record Financial Results Amid Ongoing Challenges
Over the full year, Apple's overall sales increased by 15% to $479bn, bolstered by record-setting figures for Mac computers, which rose 27% to $10.7bn. Not all product divisions shared in the growth, however, as annual sales for iPads fell by 10%, and wearable products like the Apple Watch and headphones dropped 7%. As Apple moves into the next fiscal year, the primary focus for its executive team remains navigating component availability while working to bring the highly sought-after iPhone Duo to a broader customer base.
