Rare chips could weigh on iPhone sales for holiday season

The global chip shortage could make its way to Apple’s latest iPhone 13 smartphones, but analysts believe the tech giant can overcome the impact by making up for lost holiday sales with better year-round performance. next.

On Tuesday, Bloomberg announced that Apple is expected to cut production of its iPhone 13 by 10 million units and produce 80 million units of the new iPhone models by the end of this year, due to the shortage of fleas.

Apple previously told investors that the chip shortage will affect its iPhone products, but declined to comment on Tuesday.

However, several Wall Street analysts have not changed their iPhone sales estimates in the wake of the news.

“The report does not prompt me to revise my estimate of iPhone units sold,” said Tom Forte, analyst at DA Davidson & Co.

According to Refinitiv IBES, analysts expect around 45 million units for the fourth quarter and 79.4 million units in the key holiday quarter.

“Apple enjoys market leading customer loyalty / retention, so any delay in production only pushes iPhone sales into quarters to come,” Morgan Stanley analysts wrote in a note. .

Apple also has influence over its component suppliers, given its enormous purchasing power, which means that while it may not be able to buy as many parts as it wants, it will likely get more than its rivals.

“While we believe Apple enjoys preferential supply chain treatment and is best positioned among hardware vendors, it is nevertheless not immune to the extreme circumstances felt before. the holiday sales season, ”said Angelo Zino, analyst at research firm CFRA.

For most of last year, Apple had protected its cash cow – the iPhone – from shortages by prioritizing components of the popular product.

The global chip shortage, however, has hampered Apple’s ability to sell Macs and iPads. In July, the company warned that it would start affecting iPhone production and expected revenue growth to slow.

The company’s shares have fallen around 3% since its warning in July and were down around 1% on Wednesday.

Jeff Fieldhack, research director for Counterpoint Research, said Apple’s reported reduction in production could also be part of the iPhone maker’s normal launch process of over-ordering devices to prepare for an initial rush to customers. , then reduce orders as sales trends become clearer.

Fieldhack added that sales of the iPhone 13 appeared to be healthy and higher than last year’s iPhone 12.

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