Apple to cut iPhone production goals by 10 million units due to global chip shortages

Apple is likely to cut its projected iPhone 13 production targets for 2021 by as many as 10 million units due to prolonged global chip shortages, Bloomberg news reports, citing “people with knowledge of the matter.”

TSMC

Debby Wu for Bloomberg News:

The company had expected to produce 90 million new iPhone models in the last three months of the year, but it’s now telling manufacturing partners that the total will be lower because Broadcom Inc. and Texas Instruments Inc. are struggling to deliver enough components, said the people, who asked not to be identified because the situation is private.

Apple gets display parts from Texas Instruments, while Broadcom is its longtime supplier of wireless components. One TI chip in short supply for the latest iPhones is related to powering the OLED display. Apple also is facing component shortages from other suppliers.

Current orders are slated to ship around mid-November, so Apple could still get the new iPhones to consumers in time for the crucial holiday season. The year-end quarter is expected to be Apple’s biggest sales blitz yet, generating about $120 billion in revenue. That would be up about 7% from a year earlier — and more money than Apple made in an entire year a decade ago.

Apple’s woes show that even the king of the tech world isn’t immune from global shortages made worse by the pandemic. In addition to facing tight iPhone availability, the company has struggled to make enough of the Apple Watch Series 7 and other products.

MacDailyNews Take: No surprise as, during thier last conference call with analysts in July, Apple warned that it would face supply constraints of the iPhone and iPad, citing global chip shortages:

We expect supply constraints during the September quarter to be greater than what we experienced during the June quarter.Apple CFO Luca Maestri, July 27, 2021

In terms of supply constraints and how long they will last, I don’t want to predict that today. We’re going to take it sort of one quarter at a time. And as you would guess, we’ll do everything we can to mitigate whatever set of circumstances we’re dealt.Apple CEO Tim Cook, July 27, 2021

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3 Comments

  1. THEORY: iPhone 13 PRO and MAX are being subsidized this upgrade cycle, and demand is very strong for PRO, so Apple has cancelled iPhone 13 orders and increased iPhone 13 PRO MAX orders. Sound familiar? This single supply point inference that Tim Cook warned about, has turned out to be a red herring in the past.

  2. Cook putting all his eggs in one CHEAP basket, its no surprise Apple is at their mercy. This will continue until manufacturing shifts to the USA or other Democratic countries…

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