Since the release of the iPhone 13, Apple has seen a significant increase in sales volumes, propelling them into second place among worldwide smartphone manufacturers. To avoid a supply shortage of its flagship tablet, Apple is diverting components intended for the next iPad line.
According to claims in the media, Apple has cut iPad manufacturing by up to 50% to make more components available for the iPhone 13 series assembly, ensuring that worldwide shipments do not slow.
According to IDC (International Data Corporation) estimates, Apple recovered second place by delivering 50.4 million handsets in the third quarter, which spans from July to September. According to a storey in Nikkei Asia, Apple has cut iPad manufacturing by half from its initial expectations in the last two months, with chips intended for earlier iPhones also being moved to the iPhone 13.
The core CPU and peripheral chips are shared by the two devices, which together account for more over half of Apple’s product sales. This isn’t the first time the corporation has redirected supply among its devices, even older ones.
Apple’s new flagship products usually sell out in the first three months after they are released. Following the Covid-19 lockdowns, product demand in the United States and Europe, which contribute for more than two-thirds of the company’s sales, has reached new highs.
The iPhone 13, which was released on September 24, has already witnessed strong demand in India, with Apple giving discounts in honour of the upcoming Diwali holiday. Given the high demand for 5G devices, Apple redirected iPad components to the iPhone 12 last year.
The iPad, on the other hand, was in high demand in the run-up to the festival season, owing to the rise of remote working and schooling. Last year, global shipments increased by 6.7 per cent year over year to 53.2 million units. Apple has shipped 40.3 million iPads in the last nine months, an increase of about 18%.
Apple saw it coming
Consumer electronics manufacturers have frequently recognised worldwide chip supply concerns, with Apple CFO Luca Maestri admitting that income from iPad sales during the October-December quarter will decline significantly. CEO Tim Cook has previously stated that the “industrywide silicon scarcity and Covid-19 related production issues” caused a $6 billion sales reduction in the July-September quarter.
While manufacturing difficulties had eased in September and October, Cook stressed that the firm was now “in a considerably better position today.” As a result, the chip shortage will be the most significant impediment in getting Apple goods to customers in November and December. typically its biggest revenue period.
Despite the expected revenue shortfall in the fourth quarter of 2021, Apple is expected to sell a large number of iPhones and MacBook Pros in the coming months. This is owing to the strong demand that has resulted in an increase in output. This is where the iPhone 13, which is Apple’s most popular product, comes into play. It’s no surprise that iPads have been stolen in order to produce more iPhones.
According to a report published Tuesday, Apple has curtailed manufacturing of its iPad lines in recent months in order to provide critical components for the iPhone 13, indicating that the worldwide processor shortage is having a bigger impact on the tech giant than previously thought.
According to Nikkei Asia, iPad manufacturing has been down 50% from Apple’s initial expectations for the previous two months, as a result of processors destined for the tablets being shifted to the premium iPhone 13 devices.
Aside from eating into iPad sales, Apple is also dipping into earlier iPhone models to meet what it views as an increasing need for iPhone 13 supplies. The iPhone and iPad, for example, share a number of similar processors, including so-called “legacy nodes,” or modems, and power management silicon.
According to insiders, Apple is prioritising the iPhone 13 above the iPad because internal predictions foresee better demand for the smartphone in Western countries once the COVID-19 outbreak fades.
Apple looks to be on the right track. JP Morgan said on Monday that typical delivery forecasts for some high-end iPhone 13 Pro models have increased, while lead times for other variations have moderated.
Apple’s supply chain difficulties cost the company $6 billion in the fourth fiscal quarter, according to CEO Tim Cook, who added that ongoing issues are expected to have an even bigger impact in the following quarter. Despite the supply shortage, Cook stated that Apple is on track to announce record revenue for the month of December.