Apple Expects Chip Shortage To Hit iPad, iMac Supply


Apple chief executive Tim Cook says he expects global chip shortage to constrain supply of new iPad Pro and iMac 2021, which both use new M1 chip

Apple has said it foresees supply constraints to its newly announced iPad and Mac lines due to the global chip shortage.

In a call with analysts, Apple chief executive Tim Cook said the shortages “primarily affect ‌iPad‌ and Mac”.

“We expect to be supply-gated, not demand-gated,” he said.

The new iPad Pro and iMac 2021 both feature Apple’s M1 chip, which is based on the ARM technology Apple previously used in its mobile devices, and is now expanding to its desktop and laptop platforms.

Chip shortage

The company also faced shortages of its iPhone 12 last Christmas.

In spite of the issues, its profits for the second quarter rose 54 percent year-on-year amidst surging demand for 5G iPhones.

Demand for Apple’s apps, services and electronics such as iPads and Macs has also been strong as coronavirus restrictions force users to work or seek out entertainment online.

Cook told analysts it was “very, very difficult” to determine when supply constraints might ease.

“We have a good handle on our demand – but what everybody else is doing, I don’t know.

“We will do our best, that’s what I can tell you,” he said.

Cook’s remarks echoed those of Forrester Research, which last week said it expects the supply issues to extend through next year and into 2023.

Strong demand

Apple chief financial officer Luca Maestri said Apple expects a sequential decline of about $3 billion (£2bn) to $4bn in revenues in the third quarter due to iPad and iMac supply constraints.

“The constraints come from semiconductor shortages that are affecting many industries,” Maestri said.

“It’s a combination of the shortages and the very high level of demand that we’re seeing for both ‌iPad‌ and Mac.”

The chip shortage is affecting a wide range of industries, notably automobiles, where plants have had to slow or temporarily stop production due to constraints.

The problems were triggered by a surge in demand for electronics last year, but industry watchers say the issues have been building up since 2018, when the US and China began engaging in an ongoing dispute over trade.

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