iPhone and iPad assembly stopped for several days in October — usually one of the busiest times of the year ahead of the holiday rush — because of global supply chain bottlenecks and power use restrictions in China, sources with knowledge of the predicament told Nikkei Asia for its report Wednesday (Dec. 8).
“Due to limited components and chips, it made no sense to work overtime on holidays and give extra pay for front-line workers,” a supply chain manager involved told the news outlet. “That has never happened before. The Chinese golden holiday in the past was always the most hustling time when all of the assemblers were gearing up for production.”
Apple is millions of units behind its production goals and billions of dollars behind its revenue projections on the iPhone 13 line and new iPads, which were released in September.
Production of the iPhone 13 suite of products dropped 20% short of projections in September and October, people directly involved in its supply chain told Nikkei, even after Apple prioritized all the necessary components for those products while putting others on the back burner.
That meant iPad assembly was slowed and there were 50% fewer of those products made than were originally planned and the production of older iPhones, including the iPhone 12 and iPhone SE, dropped about 25%, multiple sources told Nikkei.
At the beginning of December, Apple was slated to make about 83 million to 85 million iPhone 13 products by the end of the year, well short of the target of 95 million units. Apple is still about 15 million units short of its 230 million iPhone target for the year, the sources said.
Related: iPhone Demand Flagging During Holiday Shopping Peak
Earlier this month, Apple alerted its component suppliers that it’s seeing slower demand for its suite of iPhone 13 phones.
The company could still achieve record sales this holiday shopping season, though, with projections for a 6% increase to almost $118 billion in the last three months of 2021. The company is expected to roll out more major upgrades in its next iPhone line compared to the minor tweaks it made for the iPhone 13 models.
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