Apple is planning to cut manufacturing of the iPhone 13 by up to 10 million devices due to a global chip shortage, according to sources.
According to Bloomberg, Apple aimed to build 90 million copies of the new iPhone models by the end of the year. However, Apple told its manufacturers that the number of units would be lower because chip suppliers, including Broadcom Inc and Texas Instruments, are struggling to deliver components. Apple’s stock dropped 1.2 percent in the after-hours trade, while Texas Instruments and Broadcom also declined by approximately 1%.
Apple has remained silent about the matter. Reuters reached out to Broadcom and Texas Instruments for comment, but neither company responded right away.
Apple warned in July that sales growth would slow and that a chip scarcity, which had already hampered its capacity to sell Macs and iPads, would also stifle iPhone production. In the same month, Texas Instruments issued a bearish revenue forecast, 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
Apple has weathered the supply crunch better than many other companies thanks to its massive purchasing power and long-term supply agreements with chip vendors, leading 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.
The claimed Apple manufacturing drop might potentially be part of the iPhone maker’s typical launch procedure of over-ordering devices to brace for an initial customer rush and then lowering orders as sales trends become apparent, according to Jeff Fieldhack, research director for Counterpoint Research.
According to Fieldhack, iPhone 13 sales look to be solid and more significant than last year’s iPhone 12, and Counterpoint hasn’t changed its fourth-quarter prediction of 85 million to 90 million iPhone 13 sales.