The global semiconductor chip shortage is heading from bad to worse and it turns out that tech giant Apple is also dealing with this shortage, which has been affecting companies and industries globally.
Apple CEO Tim Cook on Wednesday, 29 April, told the investors during the company's quarterly earnings report that the company has been hit by the microchip shortage and has been forced to delay production on its iMac and iPad devices.
While several industry experts speculated that Apple won't be affected by the chip shortage, Cook confirmed that the global supply disruption is impacting its 'legacy' node chips.
Cook also informed that Apple was able to avoid any impact from the shortage in the previous quarter. The company said the shortage could now threaten Apple's profits, which it revealed on Wednesday were up by 54 percent this year.
Which Apple Products Might Be Harder To Buy?
In the coming year, Apple's flagship products such as iPhones, iMac, and iPad would be difficult to buy.
Even though the company managed to avoid any sales slowdown caused by the ongoing COVID crisis. However, as the shortage in supply continues to rise and affect the industries globally, Cook announced that iMac and iPad would be the worst-affected products, citing the disruption in chips production due to the ongoing crisis.
Luca Maestri, Apple’s chief financial officer confirmed that due to these two products — MacBook and iPad, it would lose $3 billion to $4 billion of its revenue in the next three months.
Why It's Hard To Fix The Chip Shortage?
Apple's CEO Cook did not specify which semiconductor parts were in short supply or when the issue would be resolved.
But, earlier in March, US President Joe Biden intervened to resolve this issue and has sought $37 billion in funding for legislation to supercharge chip manufacturing in the country.
Meanwhile, semiconductor industries have also rammed up their production process but has warned that the increase won’t be rampant.
Intel has recently announced to invest $20 billion (roughly Rs 1.4 lakh crore) in two new factories in Arizona. However, this does not mean that the factories can meet the current demand, experts say that the scarcity will last for more than a year from now at least.
“Due to supply chain disruptions, it may get tough to get your hands on the new Mac and iPads. For the upcoming iPhone, prices will be contingent on the global semi-conductor manufacturers. The shortage of semiconductor chips can last longer than a year. The response lies in the accurate measurement of the demand across industries, a number fluctuating with the tides of the pandemic.”Kunal Kislay CEO & CoFounder Integration Wizards Solutions
'Get Ready To Pay More for iPhones'
If the shortage continues to increase exponentially, industry experts believe that this gives companies the power to raise prices and pass on higher costs.
Devinder Maheshwari , Chief Business Officer, Beebom told The Quint that the chip shortage is affecting almost every tech and auto company. Qualcomm, which supplies 5G chips to Apple, is struggling to meet demands at the moment. Phone brands like Samsung and Xiaomi have already issued warnings that the global semiconductor shortage is straining their business.
”Apple is not immune to the chip shortage. The company will find itself grappling with the supply chain issues later this year, which could lead to consumers facing the brunt, in the form of an increase in prices of Apple products. So consumers should be ready to pay even more for a purple iPhone or an orange iMac soon.”Devinder Maheshwari, Chief Business Officer, Beebom
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