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| Apple frustrated by low demand for iPhone 13 series |
Apple is suffering from a global supply crisis and now faces another problem: declining demand. The company told its component suppliers that demand for the iPhone 13 series has decreased, indicating that some consumers have chosen not to purchase the hard-to-find device.
Due to the lack of parts, the company lowered its production target for the iPhone 13 for this year from 90 million units to 10 million units. But it is hoped that most of the shortfall will be filled next year and supply will have improved by then.
The company is now informing its sales representatives that these requirements may not be met. The company is still moving through the year-end quarter as expected, and analysts expect revenue growth of 6% to $117.9 billion in the last three months of the calendar year. However, this won't be Apple's flagship quarter.
Supply bottlenecks and delays in delivery have frustrated many consumers. Inflation and the novel coronavirus mutation are bringing new concerns to buyers who are tired of the pandemic and may abandon certain purchases.
That could mean skipping the iPhone 13 and waiting for an upgrade next year. Current range, Standard model starting at $799, Pro model starting at $999, a moderate update to the iPhone 12, iPhone 12 adopts a new design.
Bigger changes to the models are expected in 2022, giving some buyers reason to wait.
The iPhone is the company's flagship product, accounting for about half of its $365.8 billion in revenue last year.
Initiating advertising is an important step. With the introduction of the iPhone 13, Apple and wireless carriers launched active discount programs to stimulate shopping.
In some cases, users of iPhone 12 or older can get iPhone 13 very cheaply or for free. Discount programs are still available, but some discount programs save significantly less than when introducing new models.
Apple faces supply and demand problems
The company's CEO, Tim Cook, said in October that demand for new products was very strong due to interest in the latest iPhones, iPads and other devices.
He added that the company is expected to achieve record performance by the end of the year. Revenues for the same period last year amounted to $111.4 billion.
He described delivery bottlenecks as the company's biggest challenge. He predicted that Apple's quarterly revenue at the end of the year would exceed $6 billion due to its inability to source enough components, especially chips.
These restrictions also harm Apple's partners. Revenues for TSMC, the company's main chip supplier, have fallen recently, with October revenue down 12% from the previous month to $4.8 billion.
Last month, Foxconn, the leading iPhone assembler, expected its business to be lower this quarter compared to the same period last year due to the decline in consumer electronics and computers as it continues to battle flea shortages.
Now buyers are under increasing pressure. US consumer prices rose more last month than they've seen since 1990. Despite strong wage growth, rising food, natural gas, and residential property prices have eroded purchasing power.
At the same time, getting the iPhone 13 was not as difficult as it was before. Apple buyers in the US have been waiting for the iPhone 13 Pro for about a month. The waiting time has now been reduced to two weeks or less.