Although Apple, like many mobile companies, is suffering from a global supply crisis, it has recently faced a different problem, which is slowing demand.
The company stated to suppliers of its components, that the demand for the “iPhone 13” lineup has weakened, according to what a source familiar with the matter said, noting that some consumers decided to stop trying to obtain a hard-to-find product.
And “Apple” has reduced the target of “iPhone” production for the current year by about 10 million units, from a target of 90 million, due to a lack of parts, according to the “Bloomberg” network.
But Apple expects to make up for much of that cut next year as supply improves, but the company has told its distributors that those orders may not come true, according to the sources, who asked not to be identified because the discussions are private.
The company is still on track for a record holiday season, with analysts forecasting a 6% increase in sales to $117.9 billion in the final three months of the year, but it won’t be the impressive profit Wall Street envisioned.
Parts shortages and delivery delays frustrated many consumers. With inflation, the Omicron variant is bringing new concerns to shoppers exhausted by the pandemic; Some consumers may abandon the purchase of some non-core goods.
That could mean skipping the iPhone 13 altogether and waiting for its upgrade next year, when the newer model comes out. The current lineup, which starts at $799 for the standard model and $999 for the Pro model, offers a modest upgrade over the iPhone 12. The design was completely new, and bigger changes are expected for the 2022 model, giving some shoppers reason to wait.
For its part, Apple, California, declined to comment on the news.
The iPhone is Apple’s main product, and it accounted for about half of its $365.8 billion revenue during the past fiscal year. “Apple” and wireless carriers launched powerful discount programs to stimulate purchases, and in some cases, owners of “iPhone 12”, or earlier models, were able to purchase “iPhone 13” at little or no cost, and although discount programs are still available, offers Some save much less than when the new models first went on sale.
Demand was strong
During Apple’s latest earnings call in October, CEO Tim Cook said demand for new products was “very strong” — driven by interest in the latest iPhones, iPads, and other devices — and that the company It is on track for a record holiday quarter, with sales of $111.4 billion in the same period last year.
Pointing to supply constraints as the company’s biggest challenge, Cook predicted that the struggle to get enough components, especially chips, would cost Apple more than $6 billion in revenue during the holiday season.
Those restrictions hurt Apple’s partners as well, and recently, sales of the company’s main chip supplier, “Taiwan Semiconductor Manufacturing” “TSMC”, fell, with October revenue down 12% from the previous month to stand at 134.5 billion Taiwan dollars ($ 4.8 billion). .
And last month, Hon Hai Precision Industry, the main assembler of the main “iPhone” devices, expected to shrink its business in the current quarter compared to the previous year – due to the decrease in the consumption of electronic devices and computers – while it is still suffering In the case of chip shortages, shares of IQE Plc fell 24% after it warned of falling demand for smartphones, although the semiconductor company did not name any particular customer.
There is now more pressure on shoppers’ wallets after US consumer prices rose last month at the fastest annual pace since 1990, and rising food, gas and housing costs eroded purchasing power, despite strong wage growth.
Meanwhile, getting the iPhone 13 wasn’t as difficult as it used to be, and Apple shoppers in the US were waiting about a month to deliver the higher-value Pro model, and wait times have now fallen to two weeks or less.