Image Credits: The Biz Teach
According to Bloomberg, after appearing to be above the fray for months, Apple has now felt the sting of the worldwide chip shortage. The business will reduce its orders for iPhone 13 devices by 10 million units due to a component shortage.
Apple was expecting to break past sales records with the iPhone 13 earlier this year. The iPhone 12 sold significantly quicker than the iPhone 11, resulting in the first “supercycle” since the release of the iPhone 6S. According to JP Morgan research, Apple was expected to go much farther with the iPhone 13 series, with an earlier Bloomberg report claiming that Apple had ordered an initial manufacturing run of 90 million iPhone 13.
Apple is apparently unable to acquire enough processors from Broadcom and Texas Instruments to produce these iPhones due to a semiconductor scarcity. Digital Trends has reached out to both vendors for comment, and we will update this article as soon as we receive a response.
The chip shortfall has already stymied phone launches ranging from the Pixel 5a 5G to the Samsung Galaxy S21 Fan Edition (FE), so Apple’s impact will be minor in contrast. Apple has enough clout to come close to meeting its manufacturing target. Despite this setback, the firm is still in a better position than most of its competitors.
Eighty million iPhones is still a lot of gadgets, and the average selling price of the iPhone 13 ensures Apple’s bottom line won’t suffer too much. So according to Reuters, Jeff Fieldhack, associate director at CounterPoint Research, feels Apple simply overordered and is reducing its device order to more closely represent demand. The research company maintains its fourth-quarter sales forecast of 85 million to 90 million iPhone 13 devices.
Jan Stryjak, another associate director at Counterpoint Research, added to Fieldhack’s remarks via email: “Our opinion is that Apple has contingencies in place for severe shortages, and we expect them to have a few manufacturing options for crucial components.”
When production at supplier LG Display was recently halted in Vietnam due to COVID, Apple was able to rapidly transition to alternative suppliers.
Overall, we believe their supply chain has the capacity to respond to present shortages. Apple has likely secured supply for critical components until [the first or second quarter of] next year. As a result, we are maintaining our [fourth quarter] iPhone 13 projections in the [85 million to 90 million] range for the time being.”
Marta Pinto, senior research manager at IDC EMEA, shared the same sentiments. “Given that the market was anticipating 90 million or more units, a reduction of around 10 million units is substantial but not very detrimental to the company’s earnings,” Pinto explained via email to Digital Trends.
“Maybe as a result, customers will rush to get their gadget, enhancing the new series’ success even further,” Pinto added that once the firm has a clearer knowledge of the demand for certain iPhone 13 models in the first quarter of 2022, it would be able to shift resources to high-demand regions as required.
Techsponential’s Avi Greengart, on the other hand, advises caution, adding that “it’s never a good idea to read too much into individual supplier claims, and it’s equally hard to verify what Apple’s production objectives were that have now allegedly changed.”
Again, this story is quite plausible: Apple makes enormous numbers of iPhones, and there are numerous, cascading faults impacting everyone’s supply chain these days – even Apple is not immune.”
The iPhone 13 and iPhone 13 Pro provide substantial improvements in terms of quality of life over prior versions. On the Pro models, they feature larger batteries for all-day battery life, better cameras for filming, and faster displays.
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