Apple mitigates chip shortage with focus on profitable products

The global chip shortage has disrupted major automotive factories, but pushed Apple and other tech firms to become more flexible by diverting existing supplies to their most profitable products.

The global chip shortage stems from a combination of factors including the aftermath of last year’s COVID-19 lockdowns.

TSMCStephen Nellis and Subrat Patnaik for Reuters:

Apple Inc said on Tuesday chip shortages had mostly affected its iPad and Mac products in its last quarter, but would start to bite into its mainstay iPhone business, its best seller and major profit driver, in the current quarter.

“We’ll do everything we can to mitigate whatever set of circumstances we’re dealt,” Chief Executive Officer Tim Cook said in a post earnings conference call.

The comments provide an insight into how Apple, known for its deft supply chain management through long-term supply deals with Broadcom Inc and Qualcomm Inc, is dealing with the shortage ahead of the crucial holiday quarter when it sells millions of its new line of flagship phones.

Some analysts believe Apple could be prioritizing chip supplies for its new phones during the July-September quarter, which is typically the sleepiest for iPhone sales as shoppers hold out for upcoming models.

MacDailyNews Take: So, we might have to wait a bit longer for some products as Apple CEO Tim Cook said on Tuesday’s conference call that the supply constraints affect legacy silicon production nodes. Apple CFO Luca Maestri added that Apple expects supply constraints will be higher in the September quarter primarily for Mac and iPad.

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