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iPhone 13 production cut likely by 10 million units due to chip shortage: Report

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Bloomberg News reported Tuesday, citing people familiar with the matter, that Apple could cut production of its iPhone 13 by up to 10 million units due to global chip shortages.

According to Bloomberg, the company expected to produce 90 million units of the new iPhone model by the end of this year. The report said Apple told its manufacturers the number of units would be reduced as chip suppliers including Broadcom and Texas Instruments struggled to distribute components.

Apple shares fell 1.2 per cent in after-hours trading, while Texas Instruments and Broadcom were both down about 1 per cent.

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

In July, Apple forecast slowing revenue growth and said chip shortages, which had begun killing its ability to sell MacBook devices and iPad models, would also curtail iPhone production. Texas Instruments also delivered a softer revenue outlook that month, hinting at chip supply concerns for the rest of the year.

Chip shortages have put immense pressure on industries ranging from automobiles to electronics, forcing many automakers to temporarily suspend production.

With its vast purchasing power and long-term supply agreements with chip vendors, Apple has weathered supply shortfalls better than many other companies, leading some analysts to predict sales of the iPhone 13 model released in September. Would be stronger because consumers wanted to upgrade. Devices for 5G networks.

Jeff Fieldhack, research director at Counterpoint Research, said the reported Apple production cuts may be part of the iPhone maker’s normal launch process, which may be part of the over-ordering process of devices geared toward the early customer crowd. and then trim the order once sales trends become clear.

FieldHack said iPhone 13 sales appear to be healthier and higher than last year’s iPhone 12, and Counterpoint isn’t changing its estimate of 85 million to 90 million iPhone 13 sales for the fourth quarter.

© Thomson Reuters 2021


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