Apple stopped production of the iPhone and iPad lines for several days when it was supposed to enter mass production. Despite its vast purchasing power, supply chain issues have plagued Apple in the past, too. The company formerly cut its iPhone 13 production goals for the year and had to scale back its iPad production. However, this is the first time in a decade that Apple allegedly was constrained to cease iPhone and iPad assembly at its factories during China’s Golden Week.
At the beginning of October, Chinese holidays are usually the time for Apple to increase production and run 24-hour shifts for catching up on the holiday season’s shopping rush. However, this year, the tech giant has decided to take a step back on 24-hour shifts and pay its employees overtime for working over the holiday season but instead offer them some time off. The main reason for this change is that the company’s low stock of components and chips to work with. This situation may result in not getting a new iPad or a new iPhone as a Christmas gift in time for the season.
For the first time in over 10 years, Apple stopped production of the iPhone and iPad
The supply chain issues began way before the pandemic. When China was hit by the US ban on exporting high-tech components to the US, many Chinese companies were forced to stockpile inventories to survive. Nevertheless, tight COVID-19 lockdowns caused by the Delta variant have heavily affected numerous electrical components and chips in Malaysia and Vietnam.
In most cases, the lack of cheaper, peripheral device components caused bottlenecks, not its most expensive parts. For example, the iPhone 13 Max is a small, inexpensive component that costs a few cents, causing the delay. On the other hand, it is for sure that the minor component manufacturers will fall to the back of the list when it is time to purchase raw materials against the tech giants.
Will the demand still be there when Apple is back to manufacture?
Apple lost $6 billion for the quarter ending in September, as CEO Tim Cook previously stated, and he added that the company could lose even more money before the end of the year. It’s still to be seen if Apple will maintain the same level of demand until it gets enough components in place to manufacture its products.
According to Nikkei Asia, Apple informed its suppliers about the persistent demand for the iPhone 13 and accelerating in their component production for November, December and January. Although previous Bloomberg report mentions Apple’s warning to its suppliers about the weakening demand for its most significant revenue source just before the holidays.
