Supply chain crisis bites Apple iPhone sales – reports

The international supply chain crisis may have begun to bite at Apple on news the company has trimmed 10 million units from orders because it can’t source parts.

It’s the little things that can’t

Many reports claim the company has slashed its projected targets, telling manufacturers that component shortages at Broadcom and Texas Instruments are to blame. These seem to be graphics diplay and wireless chips. Though this seems to be of the record, and it is worth noting that Apple’s fiscal results loom.

Apple has sustained itself relatively well this year, even as the component crisis impacts other manufacturers. In part, this is because the size of its orders mean it has been able to secure components more easily than many competitors, but the crisis in the supply chain was inevitably going to bite the Apple in the end.

Apple had warned of supply constraints into September.

We’re being told component demand will exceed supply all through next year and potentially into 2024 and the time it takes between ordering new chips and delivery of those parts has grown for nine consecutive months.

Huge demand as iPhones hit shops

So much is unpredictable

Governments in the US and Japan are working to try to find solutions to the problem, but regulatory, political and supply chain impacts continue to blunt such response. Meanwhile in China energy supply and government-mandated climate change targets continue to generate additional problems.

At least 15 Chinese companies have confirmed production had been disrupted by power curbs, while over 30 Taiwan-listed firms with China operations had stopped work. China is now rationing power, as it copes with tight coal supply driving costs up and more restrictions as it urgently seeks to reduce emissions.

iPhone sales remain strong

We expect Apple’s iPhones to be in short supply at this time of the year, of course.

All recent reports suggest the company has achieved a second consecutive year of growth on strength of its new devices, which appear to be scooping sales — though the high point now appears likely to be more muted than anticipated.

The impact on Apple stock is visible, it is currently at $140.64/share on the pre-market from its one-year high of $154.30/share.

It remains to be seen the extent to which the current component crisis will impact Apple’s product introduction plans across the next year. Many in the industry felt that the decision to delay the most recent Apple Watch reflected a similar set of component supply problems, along with a further impact of COVID-related challenges during the final design process.

The malaise has visibly impacted the wider PC industry, which Canalys says has been dampened by COVID and component supply problems. “Disruption to the global supply chain and logistics network remains the key inhibitor of higher growth in the PC market,” said Ishan Dutt, Senior Analyst at Canalys.

Please follow me on Twitter, or join me in the AppleHolic’s bar & grill and Apple Discussions groups on MeWe.