Not even Apple is immune from the supply chain problems that are causing some of your favorite gadgets to fall out of stock at retailers. Apple says supply constraints knocked around $6 billion off its revenue during the company's September quarter, as it struggled to keep up with the demand for iPhones, Macs and iPads.
And that figure could be dwarfed by what limits to supply end up costing Apple during the holiday season. "We believe that by the time we finish the [December] quarter that the constraints will be larger than the $6 billion that we experienced in [September]," CEO Tim Cook told Wall Street analysts as Apple announced its quarterly performance yesterday (Oct. 28).
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Apple's not exactly scrounging around for loose change. Even with the supply problems, the company still posted record revenue for the September quarter, tallying $83.4 billion in sales. While that's up 29% from the same quarter a year ago, it's lower than what Wall Street analysts were expecting, which is why you may see Apple's stock price taking a dip after what otherwise sounds like a stellar quarterly performance.
Investors could also be spooked by Apple's guidance for the three months covering the holiday shopping season. Once again, Apple's expecting to set a record for revenue growth, though it's avoiding an exact forecast as it has during the COVID-19 pandemic.
But Apple's assuming that supply shortages will have an even greater impact on its bottom line during the current quarter. And that makes sense — this will be the first full quarter of sales for all those products Apple announced in September, along with initial sales for the just-unveiled MacBook Pro models with Apple's latest M1 Pro and M1 Max chips.
Apple inventory: What we know headed into the holidays
We've been tracking the available inventory for top Apple products, and it certainly reflects a situation where demand is exceeding supply. As of a few days ago, according to our iPhone 13 stock check, ordering an iPhone 13 or iPhone 13 mini meant a delay of at least a week before you could expect your new model. Add an additional two weeks for the iPhone 13 Pro models.
It's an even more severe story with the latest MacBook Pro inventory, particularly if you try to configure your own model. Some of those machines won't arrive until December.
Apple's situation is not unique, as anyone hunting for a PS5 will tell you. One of the effects of the global COVID pandemic has been a chip shortage caused by companies initially scaling back orders, only to realize that they underestimated demand.
Apple's problem isn't the newer chips that power its products. Rather, Cook told investors, it's the legacy nodes that are included in many electronic products. Often, Apple is competing with other companies that need the same components for their devices, which is what's triggering delays.
The bottom line for consumers is to place your orders early if you're hoping to get your gear in time for the holidays. You can also check out our Black Friday deals 2021 hub where we're monitoring sought-after gear that's still in stock.
Despite its warning about supply constraints, Apple struck a largely optimistic pose for its near-term finances. Strong demand and reports of high customer satisfaction will do that for a company.
"I do feel very comfortable with our operational team," Cook said. "I think we’ve got a world-class one, and I’m sure they’re doing everything they can do to collapse cycle times and improve yields and do all the things that you can do in addition to fundamental capacity investment to remedy the situation."
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