Thu, 11/05/2020 – 11:40
According to the source, a shortage of power chips materialized late in the year because of the supply chain disruptions caused by the virus pandemic. We mentioned on Sept. 1 that production delays would result in iPhone 12 Pro models hitting stores much later than usual.
“The cheaper iPhone 12 models will launch at an unspecified date in October, followed by the iPhone 12 Pro phones in November. Thanks to production delays caused by COVID-19, the iPhone 12 Pro models will hit stores even later in the season than the iPhone X did in 2017 (the company’s pioneering ‘premium’ phone hit stores on Nov. 3, 2017).”
The source warned that “disruptions are expected to persist over the next two quarters.” There was no mention by the source which chip suppliers are facing supply problems, though, without these critical chips, specific 5G iPhone production lines could be paralyzed.
“Power management is more important in the iPhone 12 than for its predecessors given additional camera features and 5G capabilities, increasing Apple’s need for these components,” Bloomberg noted.
During a recent earnings call, Apple’s Tim Cook warned about supply constraints for the new iPhone and other products – although he was not specific in what power-management chips were affected.
While there’s not much visibility from Apple about what the disruption has meant for iPhone availability during the fourth quarter, which is typically the company’s busiest selling period, Bloomberg notes delays have already developed:
“In the U.S., a check of Apple’s website shows that new iPhone 12 Pro orders won’t arrive to customers until the end of November or early December, while the regular iPhone 12 isn’t showing any delay. Many iPad models are showing deliveries between mid-November and the end of the month, while some Apple Watch models are showing delivery times in late November.”
Apple shares have been in distribution for the last couple of months.
Supply chain disruptions, potentially delaying new iPhones hitting stores is more bad news, which could limit the upside in Apple shares.
Maybe it’s time for Tim Cook to supercharge the company’s buyback program…
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Author: Tyler Durden