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Apple to reduce production due to global chip shortage

Apple production

The global chip shortage crisis may force Apple to reduce production of iPhone 13 by up to ten million devices.

Bloomberg said that Apple was expected to produce 90 million of its new iPhone models by the end of this year.

“Apple has told its manufacturers that the number of devices will be reduced because chip suppliers including Broadcom and Texas Instruments are finding it difficult to deliver components,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,” Bloomberg added.

Apple

Yesterday, Apple shares fell 1.2% in the after-hours trading, while Broadcom and Texas Instruments’ shares fell about by 1%.

Apple declined to comment. Broadcom and Texas Instruments did not immediately respond to requests for comment.

In July, Apple had expected a slowdown in revenue growth and said the lack of chips, which was beginning to affect its ability to sell laptops (Mac) and tablets (iPad) will also limit iPhone production.

The chip crisis has put enormous pressure on industries from automobiles to electronics, causing car makers to temporarily suspend production.

With its large purchasing power and long-term agreements with chip vendors, Apple has managed to avoid supply crunch better than many other companies.

This led analysts to expect iPhone 13, launched in September, to achieve great sales, as technology enthusiasts look forward to upgrading their devices with 5G networks.

But Counterpoint Research said in a research note last month that Apple is not immune to the global chip crisis.

The group lowered its forecast for global smartphone shipments to 1.41 billion devices from 1.45 billion earlier, saying the iPhone maker was in a better position than its competitors but would nonetheless be affected.

In a related context, Apple has recently launched a new lineup of iPhone smartphones that contain unprecedented new features related to the camera and video recording.

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