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Friday, January 27, 2023

Apple Shares Drop Amid Production Woes

Apple’s stock fell on Tuesday after rumors that the company may cut its iPhone 13 manufacturing plans due to a global computer chip shortage.

Bloomberg stated that Apple intended to produce 90 million iPhones in the fourth quarter of 2021.

Sources informed the business journal that Apple was now having to warn its partners that the total will be reduced by up to 10 million units.

Following the announcement, Apple’s stock dropped 1.2 percent in after-hours trade.

Broadcom and Texas Instruments, both semiconductor companies, were down 1% as sources claimed they were having trouble delivering enough chips to Apple on time.

Apple, Broadcom, and Texas Instruments have all been contacted by news outlets for comment.

Apple released four new iPhone 13 models in September: the iPhone 13, iPhone 13 small, iPhone 13 Pro, and iPhone 13 Pro Max. Pre-orders began on September 17 and began shipping on September 24.

Chip Shortage Is Playing A Role

Today, millions of items in a variety of sectors rely on computer chips to function, and semiconductor manufacturers’ operations are currently operating at full capacity to fulfill demand.

Smartphone manufacturers, such as Apple, which are among the world’s largest chip buyers, have been badly harmed, as have other industries such as the automobile industry and video game console manufacturers.

Apple CEO Tim Cook warned investors in July that a shortfall of semiconductors might hurt sales of the iPhone and iPad.

If customer demand keeps up with the amount of iPhones supplied for the remainder of the year, investment firm Wedbush forecasts that Apple will face a shortfall of more than five million iPhone 13 devices for the Christmas season.

The chip shortfall, according to Wedbush analysts Daniel Ives and John Katsingris, is “not a problem” because the devices are scheduled to be ready in early 2022.

“Taking a step back, 5 million to 10 million units shifting from the December quarter to the March quarter owing to well-understood supply chain problems is not a concern for us,” they added, “and ultimately points to a better demand trajectory than Wall Street had been anticipated.”

“Today’s announcement is little more than a speed bump in a multi-year supercycle iPhone 12/13 that is still playing out,” says the company.

Several other analysts agree with them, predicting that the new iPhone 13 models would have a good sales year as users update smartphones for 5G networks.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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