Tech Analyst Raises Concerns Ahead of Apple’s Major iPhone Launch
As Apple gears up to debut what is anticipated to be its most groundbreaking iPhone in recent years, seasoned tech analyst Paul Meeks has expressed cautious apprehensions regarding a supplier oligopoly that may transform a promising rollout into a financial strain.
Shortly before the highly projected event described by Bloomberg’s Mark Gurman as “the most thrilling iPhone launch in a decade,” skepticism looms.
Meeks, who represents Freedom Capital Markets, utilized a recent appearance on CNBC to temper prevailing enthusiasm.
He highlighted a significant concern: the memory oligopoly is asserting control this cycle, resulting in detrimental consequences for Apple’s gross profit margins.
In advance of unveiling the inaugural foldable iPhone, codenamed V68, which is predicted to commence at an eye-watering price of approximately $2,000—under the stewardship of incoming CEO John Ternus—Meeks cautioned against excessive optimism.
“I’m afraid…that you might be overselling it,” he stated, pointing to Apple’s subpar positioning in artificial intelligence as a lingering structural challenge.
Meeks’s Insights on Memory Pricing
Meeks identified a crucial factor affecting Apple’s performance: a well-established supplier oligopoly. He specifically mentioned the “big three” players in the memory sector—Micron, SK Hynix, and Samsung—who collectively dominate about 90% of the market share. He articulated the ensuing dilemma:
“A company with the heft of an Apple has to pay more. Cost of goods sold goes up, gross margins go down. And it’s a real problem.”
This pressure was echoed by former CEO Tim Cook during Apple’s Q3 FY26 financial call, where he described the market as experiencing a “100-year flood” in memory pricing, accompanied by significant inflation in memory costs, which compelled Apple to raise prices.
CFO Kevan Parekh remarked that “over 100% of that can be explained by the memory cost change,” while discussing the resultant sequential margin compression.
Impressive Financial Results Amidst Challenges
Despite these ominous forecasts, Apple’s underlying fundamentals remain robust. For the June quarter, the tech giant reported revenues of $109.42 billion—a remarkable year-on-year increase of 16.4%—with earnings per share (EPS) of $2.02, surpassing consensus estimates by 6.8%; this marks the ninth consecutive earnings surprise.
Notably, iPhone revenues reached $54.25 billion while Services accounted for $30.74 billion. Currently, Apple’s stock trades at $315.49, reflecting a notable 34.62% increase over the past year, and the company commands a staggering market capitalization of $4.61 trillion, alongside a trailing P/E ratio nearing 37.
However, Cook did caution that “for September, we expect to pay even higher memory costs.” He further indicated that supply constraints would adversely impact the production of iPhones, Macs, and iPads.
The gross margin guidance for the September quarter is projected to be between 47% and 48%, with approximately one percentage point attributable to tariff reimbursements.
The Financial Implications of Memory Pricing
One critical data point highlighted by Meeks pertains to Micron Technology. This American memory manufacturer is currently benefiting from the same pricing pressures affecting Apple.
Micron’s shares are trading at $1,001, reflecting a staggering increase of 640.4% year-on-year and 250.8% year-to-date.
Fiscal Q3 revenues soared to $41.46 billion, exhibiting a 345.7% year-on-year growth, alongside a gross margin of 84.6%.
CEO Sanjay Mehrotra emphasized that these record results underscore the strategic significance of memory in the burgeoning AI landscape.
Looking ahead, Meeks anticipates that the memory cost squeeze will endure, forecasting a protracted period without relief.
He recommends investing in AI data-center companies such as CoreWeave, Applied Digital, and NVIDIA. As investors anticipate the upcoming launch, it will be vital to monitor both the stock performance and Apple’s forthcoming comments regarding margin pressure.
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