Apple's iPhone hot streak will run into global chip shortages | MCUTimes

Apple’s iPhone hot streak will run into global chip shortages

Apple CEO Tim Cook attends the opening of the new Apple Tower Theater Store at the Apple Tower Theater on June 24, 2021 in Los Angeles, California.

JC Olivera | Getty Images

Apple reported a blowout quarter Tuesday, driven by sales of iPhones that rose 50% annually to $ 39.57 billion in sales.

It followed the March quarter, with iPhone sales up 65.5% year-on-year and Apple’s holiday quarter, with sales up 17% to $ 65.60 billion.

The iPhone is on a hot streak driven by last year’s release of the iPhone 12, which is the first significant iPhone redesign since 2017. Current iPhone consumers are upgrading to the first iPhone with 5G, and many are switching from an Android phone, Apple CEO Tim Cook said Tuesday.

But Apple now faces a problem that has imprisoned everyone from gaming console manufacturers to car companies to MicrosoftPC business: An industry deficit on chips and other components.

On Tuesday, Apple CEO Tim Cook warned that silicon “supply constraints” will affect sales on the iPhone as well as the iPad.

Cook said the shortcoming is not in the powerful processors that Apple has manufactured for its devices, but in what are called “older nodes,” or chips that perform everyday functions such as running screens or decoding audio and can be manufactured using of older equipment.

“Most of the limitations we see are of the kind that I think others see that I would classify as a lack of industry,” Apple CEO Tim Cook said in a call to analysts.

In the event of a second component failure, he attributed it to demanding that it exceed Apple’s own forecasts.

“We have some shortcomings beyond that, this is where the demand has been so great and so beyond our own expectation that it’s hard to get whole sets of parts within lead times that we’re trying to get them.”

Apple had already warned that delivery shortages would affect the company in the quarter ending in June, but those shortcomings affected the iPad and Mac, not Apple’s main product. Apple had said in April that delivery limits could be $ 3 to $ 4 billion dollars on sales, but Cook said in an interview Tuesday that Apple was able to navigate and reduce the impact to lower than expected.

“We were actually able to cushion some of it, and we got into the lower end of the lower end of the area,” Cook told CNBC’s Josh Lipton.

On Tuesday, Apple did not give an exact interval for how component shortages would affect its September quarter, but CFO Luca Maestri said the company expects that they “will be larger than what we experienced in the June quarter.”

iPhone shortages will not condemn Apple – it still expects a slower, “double-digit” growth compared to the 64.7 billion. $, it reported in last September’s quarter. But the admission shows that even Apple – with its magnificent supply chain, operations expert CEO and purchasing power of suppliers, may have trouble getting parts needed to meet demand due to a global shortage.

Apple shares fell approx. 2% after hours after earnings release despite the blowout quarter.

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