The individuals need Apple merchandise. Whereas Apple could be very happy to oblige, it might’t, as a result of there’s a world provide chain disaster. The crunch is costing the corporate billions in misplaced gross sales and protecting its cash machine, the iPhone, at arm’s size from consumers.
Apple CEO Tim Cook dinner on Thursday informed CNBC that offer chain constraints and covid-19 manufacturing disruptions had price the corporate round $6 billion in misplaced gross sales. Cook dinner made the feedback in mild of the publication of the firm’s fourth quarter monetary outcomes for the fiscal 12 months, which missed analysts’ earnings and income estimates for the primary time in years.
That doesn’t imply that Apple didn’t have a profitable quarter. It earned $83.4 billion in income, a 29% improve 12 months over 12 months, and grew in all markets and product classes. The corporate simply didn’t carry out as anticipated, falling wanting the roughly $85 billion in income for the quarter that analysts projected.
“We had a really sturdy efficiency regardless of bigger than anticipated provide constraints, which we estimate to be round $6 billion,” Cook dinner mentioned, in response to CNBC. “The availability constraints have been pushed by the business huge chip shortages which were talked about so much, and covid-related manufacturing disruptions in Southeast Asia.”
On a name with analysts, Cook dinner mentioned that the covid-related manufacturing disruptions had improved, however the chip shortages stay. The availability constraints for chips are associated to chips on legacy nodes, he added.
The missed gross sales alternatives introduced on by the provision crunch—which has affected the iPhone 13 in addition to older merchandise such because the iPhone 11, iPhone 12, 2021 iMac, and Mac Professional, amongst others—will solely worsen throughout the vacation season, Apple CFO Luca Maestri warned on the decision, the Related Press reported.
Regardless of this, Apple expects the December quarter to ship its highest income in firm historical past. This may point out that Apple is seeing excessive demand for the iPhone 13 and its different lately introduced merchandise, such because the iPad mini, Apple Watch Collection 7, third-generation AirPods, and MacBook Professional.
The corporate’s fourth quarter monetary outcomes additionally offered extra perception into the efficiency of the iPhone, Apple’s golden goose. It could be laborious to consider, however iPhone gross sales elevated to $38.9 billion, a 47% improve 12 months over 12 months. In different phrases, the corporate has managed to create a cult of iPhone stans that improve ceaselessly sufficient to make it tons of cash.
Nonetheless, Cook dinner mentioned that the chip scarcity is stopping Apple from promoting as many iPhones as it could like.
“Demand stays very strong,” he mentioned.