Apple CEO Tim Cook Warns Global Chip Shortage Will Affect iPhone Production

Apple has now warned that the global chip shortage that is currently impacting iMacs and iPads will soon affect iPhone production, signaling a slow revenue growth.

Reuters

Also Read: Phones, Laptops Could Be Expensive Till 2022, As Global Chip Shortage Looms Large

During the investor call, CEO Tim Cook revealed that the chips affected by the shortages are made with older technology, but they¡¯re still necessary as supporting parts to manufacture the iPhone.

Cook said in a statement, "We do have some shortages," Cook said, "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 those."

Tim Cook, however, didn¡¯t really reveal if this shortage will extend to Apple¡¯s next fiscal quarter -- a period when Apple usually sees a massive bump in sales, especially iPhone sales, due to the holiday season.

Angelo Zino, an analyst with research company CFRA revealed that Apple could be stockpiling chips for its next-generation iPhones in a way that could potentially harm its existing models.

He said in a statement to Reuters, "Apple will want as many chips as it can get its hands-on," Zino said. "But when you couple that with the existing supply constraints, Apple is likely going to have a more difficult time meeting demand this year."

Also Read: Covid-19 Is Causing Global Chip Shortage That Could Last Till 2023

Apple has informed its investors in the last quarter that the chip shortage could result in sales being held back by $3 billion to $4 billion. In a conversation with Reuters, Cook revealed that hit to overall revenue in the third quarter was "lower than the low end" of its previously forecasted range.

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The global chip shortage has engulfed several tech manufacturers, including carmakers who need chips for their electronics, computer manufacturers like Dell, Asus who are unable to source hardware from AMD, Intel etc.

Also Read: Global Chip Supply Shortage Could Go On For Several Years, Warns Intel CEO

In June, Intel CEO Pat Gelsinger had warned that despite the industry going to great lengths to stabilise their manufacturing, the global chip shortage could take a couple of years to get back to normal, to address the shortages of foundry capacity, substrates and components.