Apple is likely to scale back production by a significant amount, due to the ongoing global chip shortage.
This is according to Bloomberg, which cited people familiar with the matter. The sources said Apple could likely cut iPhone 13 production by as much as 10 million units.
Matters are not being helped by the arrival of upgraded Apple devices, which is heightening demand. Apple had launched last month the new Watch Series 7, new iPads, and of course the new iPhone 13 and iPhone Pro range.
And the iPhone maker is also shortly expected to reveal refreshed MacBook laptops and AirPod headphones.
But this week Bloomberg said that Apple had been expected to produce 90 million units of the new iPhone models by the end of this year.
However Apple has now reportedly told its manufacturers that the number of units would be lower because chip suppliers, including Broadcom and Texas Instruments, are struggling to deliver components.
This news had a knock on impact on Apple’s share price, which fell 1.2 percent in after-hours trading.
Apple reportedly declined to comment.
However the news of a production scale back should not come as a surprise.
Back in July when Apple was reporting its excellent third quarter results thanks to heavy consumer spending on its products throughout the Coronavirus pandemic, Apple did give a heads up to a looming problem.
Tim Cook at the time warned silicon “supply constraints” would affect sales the iPhone as well as the iPad.
He added that the shortages were not in the high-powered processors that Apple has manufactured for its devices, but in what’s called “legacy nodes,” or chips that do everyday functions like driving displays or decoding audio, and can be manufactured using older equipment.
That warning came after Tim Cook in May this year had warned he expected global chip shortage to constrain supply of the new iPad Pro and iMac.
The chip shortages, coupled with stressed global supply chains, has put immense pressure on multiple industries including car makers and tech giants.
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