Apple cut iPad production to cope with chip shortages

Source: Economic Reference Newspaper

According to Reuters, on November 2, local time, it was reported that Apple in the United States cut the production of iPad tablets in order to leave more parts including chips to the iPhone13 smartphone. According to the analysis, this shows that the global chip supply shortage has a stronger impact on Apple than expected.

Apple has cut iPad production capacity by as much as 50 percent in the past two months to free up components, including chips, for the iPhone 13. There are many identical components between the iPad and iPhone models, including core chips and peripheral chips, so Apple can switch supplies between different products in some cases, people familiar with the matter said.

Data show that the annual shipment of iPhone is as high as about 200 million units, and the iPad is only 1/4 of it (40.3 million units shipped in the first nine months of this year), the former is Apple's most core and important product, and almost all of its services and ecology are around the iPhone.

According to the Nihon Keizai Shimbun, Apple puts iPhone 13 production in the first place, mainly in anticipation that as Europe and the United States begin to relax the prevention and control measures of the new crown pneumonia epidemic, consumer demand for smartphones will exceed tablets.

Data from Conte Point Research, IDC Research and Kanalis Consulting shows that global smartphone shipments fell by about 6 percent in the third quarter due to chip shortages, but Apple's smartphone market share increased by at least 3 percent over the same period.

According to Agence France-Presse, Apple has previously said that sales of its main products, the iPhone and iPad, are limited due to supply problems. Due to the great demand for Apple's products and services during the epidemic, Apple's revenue has increased, but the current supply chain problems have overshadowed the outlook, such as the shortage of computer chips and high labor costs.

Apple's earlier earnings report showed that the company's revenue reached $83.4 billion in the third quarter of this year, a new high in the July-September quarter, and net profit reached $20.5 billion, still not as good as analysts expected of $84.7 billion.

Ives, an analyst at Wedbuch Securities, said Apple faces supply chain problems that permeate every major technology, automotive and consumer company, including Amazon. In a letter to investors, he said: "It's not a question of demand, but a supply problem that Apple and all other tech consumers must face before the year-end holiday season.

Apple CEO Tim Cook said at the earnings meeting that the supply problem was due in part to a shortage of chips and a manufacturing shutdown in Southeast Asia linked to the outbreak, which affected almost all of Apple's products.