Apple says semiconductor shortage reaches iPhone, growth forecast slows
By Stephen Nellis
(Reuters) -Apple Inc said on
Tuesday that a global chip shortage that has bit into its ability to sell Macs
and iPads will start to affect iPhone production and forecasted slowing revenue
growth, sending its shares lower.
Apple executives said revenue for the current fiscal fourth
quarter will grow by double-digits but be below the 36.4% growth rate in the
just-ended third quarter. Growth will also slow in Apple's closely watched
services business, they said.
In a conference call with investors, Apple executives also said
that while the impact of the chip shortage was less severe than feared in the
third quarter, it will get worse in the fourth, extending to iPhone production.
Shares of Apple, whose valuation has more than doubled in about
three years to nearly $2.5 trillion, were down 1.7% to $144.24 in after-hours
trading after the call.
Earlier in the day, Apple reported third-quarter sales and profits
that beat analyst expectations as consumers bought premium versions of its 5G
iPhones and signed up for its subscription services. China sales grew 58% to
$14.76 billion in the quarter, which ended June 26.
Driven by the better-than-expected iPhone sales, total revenue hit
$81.43 billion, above analyst expectations of $73.30 billion, according to IBES
data from Refinitiv. Apple's profits were $21.74 billion, or $1.30 per share,
above estimates of $1.01 per share, according to Refinitiv.
During the investor call, Chief Executive Tim Cook said that chips
affected by the shortages are made with older technology but are still needed
as supporting parts to make the company's flagship device, the iPhone.
"We do have some shortages," Cook said, "where the
demand has been so great and so beyond our own expectation that it's difficult
to get the entire set of parts within the lead times that we try to get
those."
Cook declined to predict whether the shortages would last into
Apple's fiscal first quarter, when it typically sees its biggest iPhone sales.
Angelo Zino, an analyst with research firm CFRA, said Apple could be
stockpiling chips for its next generation of phones to the detriment of current
models.
"Apple will want as many chips as it can get its hands
on," Zino said. "But when you couple that with the existing supply
constraints, Apple is likely going to have a more difficult time meeting demand
this year."
Comments
Post a Comment