It’s happened to all the big tech players, and it had to hit Apple (APPL) sooner or later. The Cupertino-based company has no options left but to cut down on the production of its lucky iPhone 13s by about 10 million units.
The cutback comes as a result of the global semiconductor chip shortage, which has been impacting companies primarily in the automotives, technology, and telecom sectors. The shortages put a dent into the company’s plans as rumors emerge that its event next week could see a MacBook update. Apple, for the large part, managed to avoid the worst of the shortage so far because of its contractual agreements with chip-makers. But with its main suppliers now facing capacity shortages, that doesn’t look to be the case anymore. While the cutback might be unplanned, industry estimates say that overall revenues still look to be on the rise with sales expected to reach $120b (7% YoY increase) in Q4 2021 — the company’s key holiday season.
why it matters
Apple’s shares closed at a 0.4% drop yesterday, while being 1.6% down over the past five days. Also, its main chip suppliers, Broadcom (AVGO) and Texas Instruments (TXN), have been down by 1.6% and 4.5% over the past five days, respectively.