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After cutting production of the iPhone 13 by around 10 million units, Apple is now slowing down the assembly of the iPad to focus on its latest phones.
Apple is reportedly cutting iPad production and using some of the shared components installed in its tablets to manufacture more iPhones, in large part thanks to an industry-wide chip shortage that has affected segments ranging from consumer gadgets and devices to automobiles and even the energy sector. Apple is known for its impeccable control of the supply chain and is expected to weather the crisis better than its rivals, but reports released in recent months suggest that even Apple is not immune to a major upheaval. industry-wide.
At the end of October, it was reported that Apple was facing the “darkest” supply issues it has faced in years, due to the current chip crisis. The company currently has a stacked portfolio of devices and is heading into the busy holiday season with not-so-favorable revenue forecasts from market analysts. Production issues are exacerbated by the fact that Apple is now making more internal chips for a larger device portfolio than at this time last year, and all of this comes at a time of serious chain issues. supply.
According to Nikkei Asia, Apple is shifting some of the key components for its tablets to manufacturing more units of its latest smartphones – the iPhone 13 quartet. Citing sources familiar with the latest developments, the report adds that Apple is also applying the same treatment to Older iPhones and uses the shared components to increase the production of the iPhone 13. Specifically, Apple hijacks common parts, such as the main and peripheral chips used in iPads and older iPhones, and directs them to assembly of the iPhone 13.
The priorities are clear because the iPhone generates more revenue
Apple would prioritize the iPhone 13 as the company expects increased demand for its latest smartphones in Western markets over devices like the new iPad Mini and the vanilla iPad refresh that have been launched. earlier this year. The move is not surprising, as nearly two-thirds of Apple’s revenue from hardware sales is believed to come from the North American and European markets. Additionally, this isn’t the first time Apple has temporarily shelved the iPad to make more phones, as the company reportedly did the same after the iPhone 12 launched last year.
Senior executives at the company have acknowledged that the current chip shortage will eat into its quarterly revenue, and the outlook for the coming quarter is also not favorable. A few weeks ago, it was reported that the company had cut iPhone 13 production by 10 million units due to supply chain disruptions. In addition to the shortage of chips, Apples Suppliers are also struggling to ramp up production of new camera components, following Apple’s decision to scale the iPhone 13 series to use new sensor-shift image stabilization technology and other lens related upgrades.
Source: Nikkei Asia
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