Apple Warns of Chip Problems, Shares Fall

Apple has warned that supply problems will hurt its sales in the next three months. Its share price fell sharply after the news. Tim Cook, the head of Apple, said the price of memory chips has risen in a way he called a "100-year flood". This means Apple earns less money on each product it sells. Apple still reported good results: money from sales rose 16 percent to $109.4 billion, and profit rose 26 percent to about $29 billion. The BBC (a British news group) said the shares fell more than 7 percent after the market closed. The New York Post said the fall reached 9.7 percent.

Cook said the real problem is that Apple did not expect so many people to buy its new products. Sales of the iPhone grew 22 percent and sales of Mac computers grew 25 percent. Some Mac computers are already hard to find. Apple thinks the iPhone and iPad will be next.

Apple also told investors that sales will grow 9 to 11 percent in the next quarter. Experts had hoped for about 12 percent. Only days before, the value of the company passed $5 trillion for a short time. This was Cook's last report as head of Apple. John Ternus will take his job on 1 September.