scorecardresearch
Follow Us:
Tuesday, August 09, 2022

Apple finally feels the effects of the global chip shortage

On a call with analysts, Chief Executive Officer Tim Cook and Chief Financial Officer Luca Maestri warned that supply constraints are crimping sales of iPads and Macs,

By: Bloomberg |
April 29, 2021 10:51:47 am
Apple, Apple Macbook, Macbook,The electronics and automotive industries are among those that have been hurt by chip shortages since last year, when a sudden rebound in orders took the semiconductor industry by surprise.

Apple Inc.’s latest quarter was a blockbuster, with soaring revenue, record Mac sales, and stronger-than-anticipated iPhone demand. There was only one major snag: The global chip shortage is finally catching up to the company.

On a call with analysts, Chief Executive Officer Tim Cook and Chief Financial Officer Luca Maestri warned that supply constraints are crimping sales of iPads and Macs, two products that performed especially well during pandemic lockdowns. Maestri said this will knock $3 billion to $4 billion off revenue during the fiscal third quarter.

The executives blamed “semiconductor shortages that are affecting many industries” and “very, very high” demand for iPads and Macs. Cook said the component shortages were for “legacy nodes,” implying the setbacks are for products using older generation processors. He wouldn’t specify how long the shortages will last, but noted that Apple did not experience this problem during the previous quarter.

The electronics and automotive industries are among those that have been hurt by chip shortages since last year, when a sudden rebound in orders took the semiconductor industry by surprise. It takes months to ramp up production at chip factories, so demand is still outstripping supply.

Subscriber Only Stories
9 FIRs, many notices: Shrikant Tyagi’s long record of notorietyPremium
Post pandemic, employees reluctant to return, firms take offices to small...Premium
Letter links Shrikant Tyagi to BJP, had police cover for over a yearPremium
Experts Explain: What it will take to fulfill India’s solar power dreamPremium

Apple had avoided any major impact from this phenomenon, until now. The company recently announced new iMac models and iPad Pros with custom M1 processors, but neither product will begin shipping until the second half of May — an unusually long delay.

Still, the company’s main product, the iPhone, seems unscathed at the moment.

Consumers, businesses and schools have been snapping up millions of iPads and Macs for remote work, and Cook suggested on Wednesday that the momentum won’t necessarily slow down after the Covid-19 pandemic ends. He said many businesses will shift to hybrid models with employees working at home and in the office. That could support continued demand for the devices.

The Cupertino, California-based technology giant didn’t provide specific revenue guidance for the fiscal third quarter. Analysts estimate revenue will top $68.7 billion, according to data compiled by Bloomberg mostly before Wednesday’s results.

In Apple’s fiscal second quarter, the Mac generated a record $9.1 billion in sales, while the iPad topped Wall Street expectations with $7.8 billion in revenue.

TWO IS ALWAYS BETTER | Our two-year subscription package offers you more at less

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest Technology News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
First published on: 29-04-2021 at 10:51:47 am

Featured Stories

Advertisement
Advertisement
Advertisement
Advertisement