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Dec. 8, 2021, 9:23 a.m. EST

Apple hit by supply crunch, saw iPhone 13 production drop 20% in recent months: report

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By Mike Murphy

Supply-chain problems and power-supply restrictions in China have taken a toll on Apple Inc., according to a new report that says iPhone 13 production fell 20% short of targets in September and October.

Tokyo-based business publication Nikkei reported late Tuesday that assembly on iPhones and iPads stopped completely at some Chinese factories during the Golden Week holidays in early October — a time when they are usually running on overdrive for the holiday season.

“Due to limited components and chips, it made no sense to work overtime on holidays and give extra pay for front-line workers,” Nikkei Asia quoted a supply-chain manager involved in the process. “That has never happened before.”

COVID-19-related disruptions to component plants in Vietnam and Malaysia contributed to the problems, Nikkei said.

Citing interviews with more than 20 industry executives, Nikkei reported Apple is falling millions of unit short of its newest iPhone and iPad devices, which were launched in September, and is missing out on billions of dollars of potential revenue.

Apple /zigman2/quotes/202934861/composite AAPL -1.14% will fall about 15 million units shy of its goal of making 230 million iPhones in 2021, Nikkei reported. While production of newer devices improved in November, production of older iPhones and iPads was significantly reduced as limited components were reallocated to new devices, the report said.

In October, Bloomberg News reported Apple would cut production goals after it anticipated falling short of its target of making 90 million iPhone 13 devices in the last three months of the year. Nikkei reported that number will be more like 83 million to 85 million units.

Nikkei said Apple declined to comment on the report.

Apple reported a rare quarterly revenue miss in October , blaming supply constraints. Bloomberg News last week reported Apple has warned suppliers that demand has slowed , and told vendors that orders might not come through on time, with production problems lingering into 2022. Still, analysts have predicted a strong holiday quarter for iPhone sales despite headwinds.

Apple shares are up 29% year to date, and up 38% over the past 12 months, compared to gains of 17% and 18%, respectively, by the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.19% , of which it is a component.

/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 159.78
-1.84 -1.14%
Volume: 115.43M
Jan. 25, 2022 4:00p
P/E Ratio
28.50
Dividend Yield
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Market Cap
$2639.96 billion
Rev. per Employee
$2.38M
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,297.73
-66.77 -0.19%
Volume: 522.19M
Jan. 25, 2022 5:04p
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