Apple Uses Scarce Semiconductor Chips To Make iPhone 13 By Curbing iPad Production

According to Nikkei Asia, Apple has reduced iPad manufacturing significantly in order to assign more components to the iPhone 13, indicating that the worldwide processor supply constraint is affecting the firm far more severely than previously suggested.

For the past two months, production of the iPad has been cut by half compared to Apple’s initial intentions, according to people briefed on the situation, with parts slated for previous iPhones also being transferred to the iPhone 13.

A number of components, including both core and peripheral chips, are shared by the iPad and iPhone models. In some circumstances, this allows Apple to switch supply between devices.

According to insiders, the firm is prioritising iPhone 13 production in part because it expects more demand for the smartphone than the iPad as Western markets recover from the coronavirus outbreak. Europe and the Americas provide 66% of Apple’s sales.

Because the peak of new iPhone sales occurs within months of introduction, Apple is focusing its efforts right now on guaranteeing the seamless manufacture of the iPhone 13, which was introduced on September 24.

The iPad, on the other hand, has seen strong demand due to the development of remote working and learning in the midst of the epidemic.

According to IDC statistics, worldwide iPad sales increased 6.7 percent year on year to 53.2 million units last year, garnering a 32.5 percent global market share, far ahead of No. 2 Samsung’s 19.1 percent share. For the first nine months of this year, total iPad shipments were 40.3 million, up 17.83 percent from the same period last year.

Global tablet shipments in 2020 were 164.1 million units, a 13.6 percent increase over the previous year.

This isn’t the first time Apple has put iPhones ahead of iPads. To protect its most famous product from supply chain limitations during the COVID-19 epidemic, it reassigned certain iPad parts to the iPhone 12, its first full-range of 5G devices, in 2020.

This time, buyers will have to wait for new iPads for an extended period of time. Those who bought an iPad with 256 GB storage at the end of October in the Americas or Europe will have to wait until December 15 for delivery, according to Apple’s website. The new iPad mini will be delivered around the first week of December to those who buy it. Customers in China, Apple’s third-largest market, must similarly wait up to six weeks for a new iPad.

Apple has recognised the global supply restrictions’ impact. In a recent earnings call, CFO Luca Maestri stated that iPad sales for the October-December quarter is expected to fall owing to component shortages, noting that this is the only product seeing a decline.

CEO Tim Cook stated that sales was $6 billion lower than it would have been owing to “industrywide silicon shortages and COVID-related production bottlenecks” from July to September. According to him, the impact for the current quarter might be considerably worse.

In the face of component shortages, Brady Wang, a tech analyst with Counterpoint Research, told Nikkei Asia that it is reasonable for Apple to prefer iPhones over iPads.

“The scale of iPhone shipments of around 200 million units a year is much bigger than that of iPads. Apple’s most important and critical ecosystems are all surrounding iPhones, its iconic product. To add one more point, iPads do not have that strong seasonality like its flagship iPhones, which are always launched in autumn,” Wang said.

(Adapted from Asia.Nikkei.com)

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