Saturday, January 22

Apple May Cut Production of iPhone 13 by Millions as US Warns of Christmas Shortage | Apple

Apple may reduce the number of iPhone 13s it will make this year by as much as 10 million due to a shortage of computer chips amid a global supply chain crisis that prompted the White House to warn that “there will be things that people can’t get “. In Christmas.

Apple was expected to produce 90 million units of the new iPhone models this year, but it told its makers that the number would be lower because chip vendors, including Broadcom and Texas Instruments, were struggling to deliver components, Bloomberg reported. Tuesday.

Apple shares fell 1.2% in after-hours trading on Tuesday, reflecting broader declines in the US equity market and in Asia, especially on fears that the lingering impact of Covid and Supply chain problems lead to rampant inflation and hamper growth.

In July, Apple forecast a slowdown in revenue growth and said chip shortages, which had started to affect its ability to sell Macs and iPads, would also affect iPhone production. Texas Instruments also offered a soft revenue outlook that month, hinting at concerns about chip supply for the rest of the year.

Apple declined to comment on the latest Bloomberg report. Broadcom and Texas Instruments did not immediately respond to requests for comment.

It is the latest sign of serious bottlenecks affecting the flow of world trade, as the chaotic economic recovery from the depths of the Covid-19 pandemic causes shortages of energy, components, finished products, labor and transportation.

Along with tech companies, automakers have been among the hardest hit by the shortage, particularly of semiconductors, with an estimated 7.7 million fewer vehicles built this year. Many American factories have suspended production this year due to a lack of parts.

Power shortages and rising energy prices have led to factory closures at major Asian manufacturing centers such as China and South Korea in recent weeks, exacerbating already critical delays across the world. global logistics system.

White House officials, struggling to ease supply bottlenecks choking American ports, highways and railroads, warn that Americans may face higher prices and some empty shelves this holiday season.

American consumers, unaccustomed to finding unavailable products, may need to be flexible and patient, White House officials said Tuesday.

“There will be things that people will not be able to get,” a senior White House official told Reuters, when asked about Christmas shopping.

“At the same time, hopefully many of these goods can be substituted for others … I don’t think there is any real reason to panic, but we all feel the frustration and there is a certain need for patience to help overcome the trouble. a relatively short period of time. “

Fears in the UK over shortages in the lead up to Christmas also rose after Felixstowe, the country’s largest container port, was forced to turn away ships from Asia due to a backlog of containers caused by the lack of truck drivers.

AP Moller-Maersk, the world’s largest container shipping company, said the labor shortage meant that containers were not being picked up and returned quickly enough, leading to a large backlog of orders.

“The problem is that now we don’t have the same speed of cash flow in and out,” said Lars Mikael Jensen, director of Maersk’s east-west network. “With fewer truckers on average, it takes more time to get the boxes out of the terminal, so they stay there.”

Concerns about shortages, and especially higher food prices, prompted UK Prime Minister Boris Johnson to appoint a new adviser, former Tesco supermarket chief David Lewis, in an attempt to resolve blockages in supply chains.

The Biden administration has launched a major effort to address supply problems that drive inflation. He formed a task force in June that meets weekly and named John Porcari, a veteran transportation official, as “bottleneck czar” to pressure private sector companies to ease traffic jams.

President Joe Biden himself plans to meet with senior executives at retail giants Walmart and Home Depot and with unions and other stakeholders on Wednesday to discuss efforts to ease transportation bottlenecks before delivering a speech on the issue.

Supply chain problems are weighing on retail and transportation companies, which recently issued a number of pessimistic earnings outlooks. Meanwhile, the Federal Reserve last month forecast an inflation rate of 4.2% in 2021, well above its 2% target.

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