In this Supply Chain Matters blog we highlight a report indicating that Apple is likely facing the need to cut its planned 2021 production targets for the newly released iPhone13 because of semiconductor chip shortages.

With ten weeks remaining until the Christmas holiday and the close of the all-important holiday fulfillment quarter, the company’s supplier network sales and operations planning, and supply chain management teams could still make up some of the chip shortfall.

Citing sources with knowledge of the matter, Bloomberg reported yesterday that Apple iPhone13 production targets could be trimmed by as many as 10 million devices this quarter because of prolonged semiconductor chip shortages. The consumer electronics and smartphone provider had initially anticipated the out of 90 million unit of the new iPhone model. Reportedly, the company is now communicating to its supplier network that the previously planned output will likely be reduced.

According to the report, wireless chip supplier Broadcom and OLED display chip provider Texas Instruments have encountered challenges in being able to deliver needed chip supply.

The iPhone maker had previously warned investors that the company could encounter supply constraints for both the iPhone and iPad models during the quarter ending in September. That situation may have spilled over to the current holiday quarter.

The report notes that while the iPhone13 Pro and the iPhone13 Max models are not scheduled to ship to customers until mid-November, the devices are currently listed as unavailable for pick-up at Apple’s retail stores.

 

Supply Chain Matters Added Perspective

In prior blog commentaries highlighting that the semiconductor shortages are not going away anytime soon, Supply Chain Matters indicated that the one exception could have producers such as Apple which garners a significant amount of influence from its global supply network partners.

Observations that even semiconductor availability is constraining Apple should be taken as a definitive reinforcement that the global chip shortage is indeed ongoing and having a multi-industry impact, regardless of company size and influence.

The one caveat in this development is that Apple’s PR teams are masters in their ability to hype pent-up demand for the company’s latest products. Perhaps by the Christmas holiday, the consumer tech giant will overcome its semiconductor shortage or allocates available supply to the most expensive feature rich models.

Certainly, a development to watch over the coming weeks.

 

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