Apple, which is facing a global supply shortage, is now facing another problem: slowing demand.
The company has told its component suppliers that the demand for iPhone 13″ This indicates that some consumers have decided not to try to buy the hard-to-find item, said people familiar with the matter.
Ready, Apple Bloomberg News has cut its iPhone 13 production target for this year by 10 million units, down from its target of 90 million units because of a lack of parts, Bloomberg News reported. But expect to make up most of that shortfall next year – when supply is expected to improve. The company is currently notifying its suppliers that those orders may not materialize, according to the people, who requested anonymity because the discussions are private.
The company remains on track for a record holiday season, with analysts predicting a 6% increase in sales to $117.9 billion (about Rs 8,84,055) in the final three months of the year. calendar year. But it won’t be the blockbuster quarter that Apple – and Wall Street – originally envisioned. Shortages and delayed deliveries have frustrated many consumers. And with inflation and omicron variation bringing new concerns to pandemic-weary shoppers, they may be skipping some purchases.
That means skipping the iPhone 13 altogether and waiting for an upgrade next year, when its successor launches. Current lineup, starting at $799 (approx. Rs. 59,890) for the standard model and $999 (approx. Rs. 74,890) for Profession, considered a modest update from iPhone 12″, has a completely new design. Bigger changes to the 2022 model are expected, giving some shoppers reason to wait.
Apple, based in Cupertino, California, declined to comment.
The iPhone is Apple’s flagship product, accounting for about half of the $365.8 billion in sales (about Rs 27,42,200) in the last financial year, and rolling out upgrades is a delicate jump. With the iPhone 13, Apple and wireless carriers launch aggressive discounts to promote purchases. In some cases, owners of iPhone 12 or earlier models can purchase an iPhone 13 for a low cost or for free. While the discounts still go on, some offer savings that are significantly less than when new models first went on sale.
Consumers are not convinced
During Apple’s last earnings call in October, the CEO Tim Cook said demand for new products was “very strong” – fueled by interest in the latest iPhone handsets, iPad devices and other devices – and the company was on track for a holiday quarter. record ceremony. It had a turnover of 111.4 billion dollars (about 8,35,100 Rs.) in the first period of the previous year.
He pointed out that supply constraints are the company’s biggest challenge. Cook predicts that the struggle to get enough components, especially chips, will cost Apple more than $6 billion (about 44,980 crore) in revenue during the holiday quarter.
The constraints have also hurt Apple’s partners. Sales to the company’s main chip supplier, Taiwan Semiconductor Manufacturing Company, has weakened recently, with October sales falling 12% month-on-month to TWD 134.5 billion (about Rs 36,370 crore).
Last month, Apple’s main iPhone assembler, Hon Hai Precision Industry Co. 24, IQE Plc saw its stock drop 24% after warning of falling smartphone demand, though the semiconductor company did not name any specific customers.
And now there’s more strain on shoppers’ pockets. US consumer prices rose last month at their fastest annual rate since 1990. Rising food, gas and housing costs are eroding purchasing power despite stronger wage growth.
Meanwhile, iPhone 13 is no longer as difficult to buy as before. Apple shoppers in the US waited about a month for the highly-rated Pro model to ship. Now the waiting time is down to two weeks or less.
– With support from Vlad Savov and Mark Gurman.
© 2021 Bloomberg LP
