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IPhone 13 production likely to drop 10 million units due to chip compression: report

Apple is likely to cut production of its iPhone 13s by as much as 10 million units due to global chip shortages, Bloomberg News reported on Tuesday, citing people familiar with the matter.

According to Bloomberg, the company was expected to produce 90 million units of new iPhone models by the end of this year. Report Apple said it had told its makers that the number of units would be fewer because chip suppliers including Broadcom and Texas Instruments are struggling to supply components.

Apple shares fell 1.2 percent after the close, while Texas Instruments and Broadcom fell about 1 percent.

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

In July, Apple predicted a slowdown in revenue growth and said chip shortages, which began to weaken its ability to sell Macbooks and iPads, would also slow iPhone production. Texas Instruments also issued a moderate earnings forecast this month, hinting at concerns about chip offerings until the end of the year.

The chip crunch has put tremendous pressure on industries from automobiles to electronics, forcing many automakers to temporarily suspend production.

With huge purchasing power and long-term supply agreements with chip suppliers, Apple has weathered the supply shortage better than many other companies, leading some analysts to predict that the iPhone 13 models launched in September will have a good year of sales as consumers push for more. update. devices for 5G networks.

Jeff Fieldhack, director of research at Counterpoint Research, said Apple’s reported production cuts could also be part of a routine iPhone maker’s process of over-ordering devices to prepare for an initial influx of shoppers and then cutting orders as sales trends become clearer. …

Fieldhack said iPhone 13 sales are looking good and higher than last year’s iPhone 12, and Counterpoint has not changed its estimate of iPhone 13 sales at 85-90 million for the fourth quarter.

© Thomson Reuters 2021

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