Apple warns memory chip costs are 'unprecedented' as UK meat freezers join fridge hack fallout

Apple shares fell 2.75% in after-hours trading on Wall Street on Monday. The company warned that memory chip costs will bite deeper into margins than it had expected. The Guardian reported the reaction. Apple earned $30.71bn, or $2.10 a share, in the July to September period. Analysts polled by FactSet expected $1.99 a share on revenue of $113.4bn.

"What we're seeing with memory pricing right now is unprecedented," chief executive John Ternus told the earnings call, according to the Guardian. He said memory costs in the fourth quarter would be higher again than in the previous three months.

The cause is not a shortage of fab capacity in the ordinary sense. The AI datacentre buildout is pulling memory supply away from consumer hardware. The industry has spent months calling the squeeze "RAMageddon". Apple has already pushed through price rises on iPad and MacBook in June and on iPhone in September. Ternus said those rises "provided some offset". Gizmodo reported that the company also flagged its Siri AI spending as a drag on profit.

What the numbers say about the offset

Revenue rose 12% year on year. Ben Barringer, head of technology research at Quilter Cheviot, called the results "OK, if on the disappointing side" in comments to the Guardian. He pointed to iPhone sales and strong Mac Mini demand from users running agentic AI, plus China growth. iPad and wearables disappointed, and services grew 10%, below the group average.

Analyst Jacob Bourne of Emarketer argued that Apple's relatively light spending on AI infrastructure had protected its cashflow. He said partnerships with companies such as Alphabet let it add AI capability without the same financial exposure as peers.

That is a reasonable read of the quarter. It is also the read of a company that has just discovered its input costs are set by someone else's capital expenditure programme.

"There are so many vulnerabilities out there that … you could say are waiting to be exploited," said Richard Horne, chief executive of the NCSC, at the launch of its annual review on Tuesday.

Separately on Tuesday, the UK's National Cyber Security Centre said it was working with British meat suppliers. Their cold units were hit in the wave of refrigeration attacks that struck European supermarkets on Monday. Paul Chichester, the NCSC's director of operations, spoke to the Guardian's reporter at the annual review launch. "We're aware of those incidents in the UK, and obviously we're working with the affected organisations," he said.

The British Association of Independent Meat Suppliers told the BBC that some of its more than 300 members were affected. One company's cold units reached up to 100C, and two others reported units beginning to defrost. Aims said the units were empty at the time and no produce was lost. The NCSC said the national impact was minimal.

A month, two waves, default passwords

The supermarket disruption is the second such wave in a month. CNBC reported on Tuesday that Ahold Delhaize had dozens of Delhaize stores affected in Belgium and Luxembourg. Colruyt Group said five Spar stores in Belgium were targeted. Carrefour told the BBC 15 Belgian stores were attacked, and Intermarché reported 15 of its 153 Belgian stores impacted. IKEA told CNBC a cyber incident affected refrigerators and freezers at its Mons store in Belgium between Sunday and Monday. ICA in Sweden, Kesko in Finland, Supervalu in Ireland and One Selver in Estonia also reported disruption, CNBC said.

Tom's Hardware reported on Monday that hackers remotely activated freezers' built-in defrost mode and raised temperatures to 50 degrees Celsius. It cited Bloomberg and Belga News Agency. Refrigeration fitter Sabcobel estimated at least twenty units were affected across Belgium. The Hacker News and Bleeping Computer both covered the same wave.

The technical story is less exotic than the headlines suggest. The Guardian reported that the earlier French attack involved legacy technology connected to the internet with default passwords. Xavier Bellekens is chief executive of the cyberdefence firm Lupovis. He told the Guardian his firm logged 256 attempted attacks from 91 different sources between 20 October and 30 October. The attacks hit honeypot traps built to look like Danfoss fridge controllers. Most authentication attempts used the manufacturer's publicly documented factory-default credentials. Chichester said the attacks were not AI-enabled and used vulnerabilities that had been "out there for a long period of time".

That distinction matters for how this gets fixed. Ollie Whitehouse, the NCSC's chief technology officer, said manufacturers needed to be encouraged to make connected devices safer. Consumers needed to accept paying more for safer equipment, he said, per the Guardian. The alternative is what happened this week: food thrown away because a controller shipped with a password anyone can look up.

The wider price picture

Memory is not the only input getting more expensive. Rising energy costs pushed eurozone inflation to 3.8% in September, a three-year high, with energy inflation at 18.8%. Irish inflation climbed to 4% this week, the Irish Independent reported on Tuesday. Those figures sit in the background of the Apple warning rather than explaining it. The chip squeeze is a demand shock from AI datacentres, not an energy story.

For European buyers, the practical question is whether device prices keep climbing. Apple has already raised them twice this year and says fourth-quarter memory costs will be higher still.

Ternus gets credit for a strong first quarter in the job. He does not get to set the price of the memory inside the phone.