Apple is likely to reduce the production of the brand new iPhone 13 by about 10 million units. According to Bloomberg News, this might be due to the global chip shortages. Here’s the full story.
Why is Apple cutting down iPhone 13 productions?
According to reports, Apple was expected to manufacture a total of 90 million units of the iPhone 13 by the end of 2021. However, Apple later revealed t its manufacturers that the output would be much lower. This is because its chip supplies—Texas Instruments and Broadcom are grappling to produce them. Additionally, Apple shares fell by a total of 1.2 percent during after-hours trading. Additionally, Broadcom and Texas Instruments saw a 1 percent fall each.
“The reported Apple production cut could also be part of the iPhone maker’s normal launch process of over-ordering devices to be prepared for an initial customer rush and then trimming orders as sales trends become clearer,” said Jeff Fieldhack. Fieldhack is a research director at Counterpoint Research. He also revealed that the iPhone 13 sales are healthier and more than the iPhone 12. However, they are not changing the estimates for 2021’s fourth quarter.
How did it begin?
It all began in July when Apple forecast began slowing revenue growth and reported chip shortages. This has not only hindered iPhone numbers but also its ability to sell iPads and Macs. In July, the chip suppliers also showed a soft revenue. In addition to this, they displayed the chip shortage issue for the rest of the year.
However, so far, the tech giant has declined to comment on the issue. Similarly, the chip suppliers did not respond to requests for comments right away. The chip crunch has led to immense pressure in all major industries—from electronics to automobiles. Moreover, Apple has added more pressure to the system by making long-term agreements with manufacturers.