According to Bloomberg News, Apple is likely to cut manufacturing of its iPhone 13 by up to 10 million devices due to a global chip shortage. They are certain reasons discussed in the article ahead. In its report, Bloomberg made revelations while citing sources familiar with the situation
Apple aimed to build 90 million copies of the new iPhone models by the end of the year. According to sources, Apple informed its suppliers that the manufacturing of the number of devices would be reduced. Resulting from a shortage of components from chip suppliers such as Broadcom and Texas Instruments.
In the after-hours trade, Apple’s stock sank 1.2 percent, while Texas Instruments and Broadcom both declined roughly 1%.
Apple has remained silent about the matter. Reuters reached out to Broadcom and Texas Instruments for comment, but neither company responded right away.
In July, Apple predicted that sales growth would slow. A chip shortage, which had already hampered the company’s capacity to produce Macbooks and iPad models, would also hamper iPhone production. In the same month, Texas Instruments issued a dovish revenue forecast. Thus, implying that chip supply issues would persist for the rest of the year.
The chip shortage has put enormous strain on businesses ranging from automobiles to electronics; prompting many automakers to halt production temporarily. Chip dependency is basic in the electronics industry. The basic model of any device is made on the chip only.
Apple has weathered the supply crunch better than many other companies. Thanks to the company’s massive purchasing power and long-term supply agreements with chip vendors. This influences some analysts to predict that the iPhone 13 models released in September would have a strong sales year as consumers looked to upgrade devices for 5G networks.