Apple’s Nightmare Before Christmas

For the first time in more than a decade, Apple has had to suspend production of iPhones and iPads due to overloaded factories and the impact of supply chain disruptions.

Apple “misses” production target due to lack of chips

“Due to the limited availability of components and chips, there is no need to pay extra for frontline workers to work overtime on holidays.”, an Apple supply chain manager told Nikkei Asia.

After launching the new iPhone 13 and iPad lineup in September, Apple has to cut productiont. This not only makes America’s most valuable business miss out on billions of dollars in revenue, but also confuses consumers because they don’t have time to buy some of its products. Apple to give as a gift during Christmas due to the delivery time will extend into January.

Although Apple reduces costs from products like iPad or older iPhone generations like iPhone 12 and iPhone SE in favor of the latest smartphone line, in September and October, iPhone 13 production is still down 20%, older iPhones are also down about 25%. Overall, despite ramping up production again in November, Apple is still about 15 million iPhones short of its goal of producing 230 million units by 2021.

The “butterfly” effect makes Apple wobble

The disruption caused by Covid-19 in Malaysia, the Southeast Asian country that plays a key role in chip packaging and testing, lengthens the time it takes to assemble Apple products in the final stages.

“Even if you have 99% of the parts available, if you’re missing just one or two or three small parts, you won’t be able to start the product assembly process.” An executive at an Apple supplier said.

Blockade because of Covid-19, limited energy use and shortage of components made Apple “crisis” during the year-end shopping season. (Photo: Nikkei)

Plus, unexpected restrictions on industrial energy use in China have added to the predicament for Apple. Specifically, at the end of September, due to emissions surpassing environmental indicators and rising coal prices, China imposed restrictions on electricity use in key industrial provinces, including Guangdong and Jiangsu. – where Apple operates more than 150 facilities that manufacture essential components from printed circuit boards to batteries.

Texas Instruments, NXP Semiconductors, Nexperia, STMicroelectronics, which are important chip suppliers for iPhones, iPads, Macbooks, and Apple Watches, were also unable to supply Apple with enough chips due to disruptions caused by Covid-19 in Southeast Asia, along with snowstorms in Texas and earthquakes in Japan over the past year.

2021 is shaping up to be a strong year for the brand, as Apple has the opportunity to grab market share from Huawei Technologies. This caused iPhone shipments to increase by nearly 30% compared to 2020. However, the joy only lasted for the first 9 months of the year, before the “storm” hit.

Apple CEO Tim Cook acknowledged that supply constraints cost Apple about $3 to $4 billion in revenue from April through June and another $6 billion in July. in Apple’s financial statements around the end of January 2022.

Will Apple’s situation be better next year?

Wall Street forecasts say Apple could hit a net profit of $30.8 billion in the final quarter, up 7% from 2020 despite losing billions of dollars in revenue.

The world’s top three chipmakers – Intel, TSMC and Samsung – have embarked on their most aggressive capacity expansion plan yet, promising to spend more than $350 billion over the coming years to help alleviate chip shortages. . Meanwhile, China’s top chip maker SMIC also pledged to triple its production capacity.

Many sources said that Apple has asked suppliers to speed up iPhone production in November and December. Apple has repeatedly reassured the market that buyer demand is still there and it simply pushed back a few orders. order due to limited supply.

Huong Dung (According to Nikkei Asia)

Apple continues to

Apple continues to “make it difficult” for users in Vietnam

According to some experts, Apple applies new warranty policies to “clean up” the market, gradually eliminating portable devices floating in Vietnam.


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