So what’s going on Apple? On a day when it tweeted that it had a major product launch next Monday, the tech giant’s shares dipped in after hours trading on reports that it will be forced to slash current iPhone production and sales forecasts by up to 10 million units because of the continuing shortage of computer chips.
Normally these sorts of rumours come and go, but given the growing concerns among investors around the world about the impact of supply chain shortages, product problems and high levels of inflation, this report assumes greater importance, especially as it involves Apple, the most iconic consumer product around the globe, the start of the new quarterly reporting season and at the start of the run up to the biggest quarter of all for the company and US business.
The story, first reported by Bloomberg media in the US, blamed a shortage of chips from producers Broadcom and Texas Instruments.
Apple’s next hardware event will take place next Monday, October 18, according to invites sent out on Tuesday.
Tech media said the company is widely expected to use its second fall event to launch a pair of new MacBooks, a redesigned higher-end Mac Mini, and possibly a pair of third-generation AirPods. The product launch will be online at 1pm New York time Monday or 4am Tuesday, Sydney time.
The tweet didn’t help the shares in regular trading – they fell 0.9% in a weak market, and then fell by another 1.3% in after hours dealings when news of the reported iPhone shortfall emerged.
The medias reports said that Apple was planning to produce 90 million iPhone 13 models this current quarter, but Apple’s manufacturing partners have been informed that the totals will be lower because Broadcom and Texas Instruments are not able to deliver enough components.
Apple’s iPhone 13 supplies are already constrained, and further shortages during the holiday period will push delivery times even further going forward.
Apple is already taking longer to ship Macs and other products from the Apple store because of component shortages.
Unless Apple says something in the meantime, next Monday’s event could very well by dominated by the shortfall.
Apple is due to release its 4th quarter (September) results and full year figures on October 28.
If Apple in anyway confirms the report it will overshadow the quarterly earnings reports from a host of other companies – especially big techs and could very well set up Wall Street for months of wobbling momentum.
Cars of all types, TVs, gaming consoles, mobile phones (apart from Apple), laptops, industrial machinery are among the products to have been hit by the chip shortage now 18 months old and not improving until well into 2022, according to many analysts.