Apple warns of supply chain being hit by chip shortage

Apple said, at its third fiscal quarter results, that the chip shortage will soon affect its business. The company CFO Luca Maestri estimates that the situation will hurt its revenue around $3 billion to $4 billion.  However, he added that he still expects to see the company record double digit growth in the company months.  

“It is remarkable that the last four quarters for Mac have been its best four quarters ever,” said Maestri. The Mac business continues to grow as more and more people purchase desktop and laptop machines to work from home while offices around the world continue to be shut. But that is not the only reason for the sales of Mac to increase, the release of the M1 Macs has sparked great interest in Mac computers.

Imbalance in demand and supply of iPhone and iPad

Apple has always designed its own silicon chips for the iPhone, the iPad, and the Apple TV. Last year, the company started designing chips for its Mac computers as well. The problem will reportedly not be in manufacturing the main chips of Apple devices but the other chips which are used for display output, audio output, and for ports.

M1 MacBook Air
M1 MacBook Air

“The majority of constraints we’re seeing are of the variety that I think others are seeing, that I would classify as industry shortage,” said Apple CEO Tim Cook. The company is also reportedly facing an imbalance in the supply and demand of the iPhones and iPads. Macs continue to sell like hot cakes with sales expected to increase even further when Apple releases more Mac products powered by its M-series chips.

The work from home (or remote work) has reportedly sparked an increase in the practice of replacing old computers with brand new, as most near their end-of-life. Apple CEO Tim Cook added, “We do have some shortages in addition to that, where the demand has been so great and so beyond our own expectation that it’s difficult to get the entire set of parts within the lead times that we try to get…”

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