Chip Shortage Forces Apple to Reduce iPhone Production: What Will This Mean for Holiday Shoppers?

Antalya, Turkey - September 14, 2021: Back view of new iPhone 13 white smartphone.
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Apple could be cutting its iPhone production by as many as 10 million units, Bloomberg reported Tuesday, based on information from an anonymous source familiar with the matter. Supply partners, Texas Instruments and Broadcom are unable to supply the chips needed to manufacture the 90 million iPhones Apple projected to deliver in the last three months of the year.

See: Chip Shortage Leads to Projected $210 Billion Loss for Auto Industry in 2021Find: 4 Critical Industries Affected by the Chip Shortage

One chip from Texas Instruments, used to power the OLED display, is in short supply, along with Broadcom wireless components. Apple is also grappling with component shortages from other suppliers, as well, according to the Bloomberg source.

A graph from Susquehanna Financial Group shows that, in September, there was a 21.7-week wait between ordering chips and receiving delivery. The number has climbed steadily from prior years when it took between 12 and 14 weeks to take delivery.

For consumers hoping to give or receive an iPhone 13 Pro or iPhone 13 Pro Max for Christmas, the chip shortage could put a damper on their plans. Apple’s newest model went on sale in September but hasn’t shipped to customers yet. The devices are still listed as “currently unavailable” for pickup at retail stores, too. Apple is also struggling to make enough Apple Watch Series 7S to meet holiday demand.

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With 66% of consumers concerned that supply chain shortages, in general, could ruin their holidays, Apple’s delays could impact what’s under the Christmas tree this year. However, the company is saying current orders are expected to ship around mid-November, so if you’ve already purchased an iPhone for the holiday season, you’re likely to have it in time.

See: As Anxiety at the Grocery Store Mounts, Over Half of US Shoppers Demand Supply Chain TransparencyFind: IMF Downgrades US Growth Forecast Citing Supply Chain Disruptions, Inflation

Apple stock dipped 1.6% overnight after Bloomberg released the news and is hovering just under $140 today. However, if the company generates the projected $120 billion in the last quarter, representing a 7% year-over-year increase, Apple stockholders will still have plenty to celebrate.

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