The global chip shortage could disrupt the iPhone 13 release window. According to a fresh rumor, Apple has lowered its production goals by up to 10 million units due to production challenges caused by a shortage of components.
While the ongoing chip shortage caused by the Covid pandemic has impacted PS5 restocks, automobiles, and other phones, we hadn’t heard if the iPhone 13 would be affected. However, despite Apple’s plans to create 90 million iPhones (including the iPhone 13, iPhone 13 mini, iPhone 13 Pro, and iPhone 13 Pro Max), its suppliers Broadcom and Texas Instruments have failed to meet demand.
Global chip shortage
Millions of products in a variety of industries now rely on computer chips to function, and semiconductor manufacturers’ operations are currently operating at full capacity to satisfy demand.
Smartphone manufacturers, such as Apple, which is one of the world’s largest chip importers, have been severely damaged, as have other industries such as the auto industry and video game console manufacturers.
The supply difficulties for Nvidia GPU stock, as well as the PS5 and Xbox Series X stock, have been the focus of the global chip crisis. This latest revelation indicates how deep the problem reaches: Broadcom supplies wireless components for the iPhone 13, while Texas Instruments provides display parts. And those aren’t the only suppliers that are apparently having trouble getting enough components to Apple.
Apple CEO Tim Cook warned investors in July that a chip shortfall could harm iPhone and iPad sales.
How would 10 million less iPhones affect Apple?
While sales don’t always equal production, phone shipments are a good indicator of success, and having 10 million fewer iPhones can hurt Apple’s bottom line. But, given how many figures are flung around, it’s crucial to put this in context. According to last year’s figures, up to $7.2 billion in sales were lost — read on to learn how we got there.
In previous years, the months following the release of a new iPhone saw the highest sales of the year: towards the end of 2020 (which Apple aligns with early January on its financial calendar, making this Q1 2021), Apple sold a record $65 billion in iPhones.
Companies are generally reticent to specify units sold in their reports (unless they want to brag about it in press releases), but IDC estimates Apple supplied 90.1 million iPhones during that time period.
If Apple had supplied 10 million fewer iPhones during that time period, revenues would have plummeted by $7.2 billion, according to napkin calculations. Of course, that’s a wild guess, and it doesn’t take into account whether customers would accept an iPhone delivered later rather than abandoning up if they couldn’t open one during the holidays.
It also doesn’t account for the iPhone’s record sales throughout the 2021 fiscal year: Q1 2021 iPhone sales were up 18% over Q1 2020, and Q3 2021 iPhone sales were up nearly 50% over Q3 2020 sales (according to Apple’s earnings announcements for Q1 and Q3 2021, respectively). To put it another way, we’re on course for another record year of iPhone sales this holiday season, and 10 million fewer iPhones in stores or online may put a significant dent in Apple’s biggest sales period ever.
Tim Cook and other Apple executives will have to provide guidance when the company reports its Q4 2021 earnings on October 28, 2021.