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Apple Set to Cut iPhone Production Goals Due to Chip Crunch

81 points by gardaani 5y ago

londons_explore 5y ago
And with apples negotiation team behind these parts deals, you can be pretty sure that they're the highest priority client. That means everyone else won't be getting many of these chips at all before apples order is filled.
- throwaway4good 5y ago
  Exactly. This shows the depth of the problem. Of all the suppliers, Apple probably has the most control of its supply chain. I am curious what the situation looks like at the major Chinese manufacturers? Even though they werre probably early in buying up supplies being afraid of US sanctions.
  - londons_explore 5y ago
    The Chinese suppliers seem much more nimble with redesigning a product with different parts to make stuff work. Umidigi for example seems to bump model numbers almost every month on some product ranges, and the different models usually have different firmware images, suggesting they're switching components in or out. I've seen no sign of a shortage of new phones for sale online, so it doesn't seem the shortage is hitting too hard.
- the-dude 5y ago
  If they really were the highest priority client, the fab would run exclusively for them, right?
  - avianlyric 5y ago
    They have done in the past. I’m pretty sure Apple helped fund TSMCs 5nm process in exchange for exclusive access to the process for a while. But we don’t know which chips are in s as shortage, it could be memory chips, display controllers, battery management chips. Plenty of ICs in an iPhone to pick from, and you can’t build an iPhone without them all.
the-dude 5y ago
Perhaps there is a new dynamic : in the past Apple had a good negotation position because 1) the volume of their orders 2) they were willing to pay a premium as they are in the business of selling premium products. Now everybody is willing to pay a premium as long as they can get parts.
- cududa 5y ago
  I heard it’s the Qualcomm power management silicon that’s in short supply
notimetorelax 5y ago
https://archive.vn/vSjP4 https://archive.vn/vSjP4
idorosen 5y ago
Does anyone have any data on how much of this is actually due to the chip crunch versus reduced demand (especially at current iPhone 13 price points)? For business/enterprise, one effect of the pandemic WFH response has been suppressing tech refresh of cellphones at many large employers -- folks aren't traveling as much for business. I know leisure travel is getting back up to pre-pandemic times domestically in the US, but internationally it's still down overall, so maybe the average consumer use case for a new shiny iPhone is down as well? Also, annoyingly, Apple hasn't reintroduced fingerprint scanners (TouchID) to their phones like some others have, while at the same time FaceID continues not to work with face masks on. These and other anecdotes make me question whether this is cover for decreased demand, or at least decreased demand forecasts.
- tonyedgecombe 5y ago
  That doesn’t seem to match up with this: https://www.barrons.com/articles/apple-iphone-wait-times-multiyear-highs-51633962094 https://www.barrons.com/articles/apple-iphone-wait-times-mul...
- Slippery_John 5y ago
  That seems like it would be difficult data to gather. Reduced availability certainly can reduce demand by itself, somebody might give up if the thing isn't available after a while. I, for instance, would love to upgrade if I could get ahold of one of the things. If I still can't walk into a store and get one two months from now then I'll just wait it out another generation. > FaceID continues not to work with face masks on Well.... it does if you have an apple watch. I would still rather have a touch id option though.
  - simonh 5y ago
    Given the long wait times for these things I think it's pretty clear this is a supply issue, not a demand issue. As for touch authentication, there's still the SE so at least they still have that as an option in the lineup. The thing is they begin the design outline for new iPhones from 24 to 18 months in advance of launch. Even a 2 year pandemic is a temporary issue relative to the iPhone design cycle, and any design response they might make to it would only show up towards the end of the crisis anyway.
pkpioneer 5y ago
How to Identify Objects with Your iPhone: https://pkpioneer.blogspot.com/2021/09/how-to-identify-objects-with-your-iphone.html https://pkpioneer.blogspot.com/2021/09/how-to-identify-objec...
mickjagger 5y ago
So this company has pretty much infinite money but they can’t get or make chips. Huh. Don’t know what to make of that.
- Maakuth 5y ago
  Well, they might be able to use some of that infinite money to build a chip factory of their own. However, it would take years to become online, so the situation is likely to be resolved until that anyway. And it would be very expensive indeed, as it seems to be extremely difficult and expensive even for companies that already are in the semi business, such as Intel.
mupuff1234 5y ago
I wish the major phone manufacturers would abandon the yearly release cycle for new models - it makes everything so much more boring and predictable. Not that it's ever gonna happen.
- michelb 5y ago
  I think multiple releases per year would be even less interesting as there would be much less to look forward to. I think phones have almost approached their final form, a slab of glass. The next 'innovation' could be a really good, thin folding model without a noticeable crease. I don't use my phone that much so I can't think of important, game-changing things I would like to see besides unrealistic battery-life expectations.
  - diggan 5y ago
    I'd love it if manufacturers could go back to try to make mobile phones smaller again, at least for those with smaller hands (like me). It's almost impossible to find a feature phone that I can use with one hand and reach everywhere with my thumb. Latest phone is a iPhone 12 Mini, but CarPlay is so horrible (and important for me) that I'm looking for a good Android phone again (Android Auto is miles ahead of CarPlay), with the same size and good performance. But it's really hard to find good ones.
    - wffurr 5y ago
      Apparently the mini versions of the iPhone sold poorly enough that they won't produce a mini version of the iPhone 14, and instead will push the SE as their small sized phone. At this point, backing Kickstarter projects is likely the only way to get a small phone made.
      - deleted 5y ago
        [deleted]
    - iSnow 5y ago
      Same here, and now that my Sony Xperia Compact is now on life support, I will have to switch to iPhone. There is no Android phone maker left that produces something between the ultra-small Atom and what used to be called phablets. And even Apple seems to have a hard time selling smaller phones.
KptMarchewa 5y ago
If even Apple is affected, there's no hope for short or mid-term end of this.
- laurent92 5y ago
  Is this why they didn’t release the M2 during the keynote last month?
  - michelb 5y ago
    I think that would be a commercial decision? Why introduce something way better right away? I expect the M-series macs to be milked just like they milked the iPhone chips. M1, M1s, M2, M2s, etc. Small incremental changes so they can keep selling. I Apple would introduce a radically faster M2(+much faster GPU) and >32Gb ram, with decent connectivity options, I would probably not buy another mac for 12 years again. I already use my macs a long time.
    - iSnow 5y ago
      We'll see next Monday, at least rumors are going wild already :)
  - marcellus23 5y ago
    They were never going to do that. The September keynote is always about iPhones.
2OEH8eoCRo0 5y ago
Sounds like an excuse. Apple can afford to pay whatever price these chips are.
zepto 5y ago
Is there any evidence this is actually true? Literally every year at this time, Bloomberg or the WSJ reports that Apple is due to cut production due to some negative factor or another. So far it has always turned out to be complete bullshit. It’s pretty obvious that there are many parties who could benefit from such a rumor.
- Strilanc 5y ago
  Do you have a few examples?
  - zepto 5y ago
    2020: https://www.wsj.com/articles/apple-delays-mass-production-of-2020-flagship-iphones-11587984138 https://www.wsj.com/articles/apple-delays-mass-production-of... 2019: https://asia.nikkei.com/Business/Companies/Exclusive-Apple-cuts-iPhone-production-plan-by-10 https://asia.nikkei.com/Business/Companies/Exclusive-Apple-c... 2018: https://www.theverge.com/2018/11/19/18102562/apple-production-order-cut-iphone-demand https://www.theverge.com/2018/11/19/18102562/apple-productio... 2017: https://www.techspot.com/news/71509-apple-slashes-iphone-8-production-according-supply-chain.html https://www.techspot.com/news/71509-apple-slashes-iphone-8-p... 2016: https://www.theguardian.com/technology/2016/jan/06/apple-shares-fall-reports-cuts-iphone-6s-plus-production https://www.theguardian.com/technology/2016/jan/06/apple-sha...
    - jjulius 5y ago
      >Literally every year at this time... At the risk of being pedantic, your 2020 link is from April 27th, 2019 link is from January 29th, and your 2016 link is from January 6th. Only two of five - 2017/18 - are from this time of year.
      - zepto 5y ago
        You are being pedantic. The time of year is not relevant to the point, and in any case 2 examples in addition to the current one is more than enough. There is a regular stream of these rumours which have proven to be empty so far. Perhaps the wolf will really come this time.
mensetmanusman 5y ago
This will hit earnings and could spark the next recession. Be ready for an interesting winter where people won’t be able to repair broken furnaces and will have to abandon homes. This could snowball infrastructure damage. Response to pandemic about to get wild?
- Tagbert 5y ago
  Panic!!!
- ryan93 5y ago
  Wrong
deleted 5y ago
[deleted]

81 points by gardaani 5y ago

And with apples negotiation team behind these parts deals, you can be pretty sure that they're the highest priority client. That means everyone else won't be getting many of these chips at all before apples order is filled.

throwaway4good 5y ago
Exactly. This shows the depth of the problem. Of all the suppliers, Apple probably has the most control of its supply chain. I am curious what the situation looks like at the major Chinese manufacturers? Even though they werre probably early in buying up supplies being afraid of US sanctions.
- londons_explore 5y ago
  The Chinese suppliers seem much more nimble with redesigning a product with different parts to make stuff work. Umidigi for example seems to bump model numbers almost every month on some product ranges, and the different models usually have different firmware images, suggesting they're switching components in or out. I've seen no sign of a shortage of new phones for sale online, so it doesn't seem the shortage is hitting too hard.
the-dude 5y ago
If they really were the highest priority client, the fab would run exclusively for them, right?
- avianlyric 5y ago
  They have done in the past. I’m pretty sure Apple helped fund TSMCs 5nm process in exchange for exclusive access to the process for a while. But we don’t know which chips are in s as shortage, it could be memory chips, display controllers, battery management chips. Plenty of ICs in an iPhone to pick from, and you can’t build an iPhone without them all.

the-dude 5y ago

Perhaps there is a new dynamic : in the past Apple had a good negotation position because 1) the volume of their orders 2) they were willing to pay a premium as they are in the business of selling premium products. Now everybody is willing to pay a premium as long as they can get parts.

cududa 5y ago
I heard it’s the Qualcomm power management silicon that’s in short supply

notimetorelax 5y ago

https://archive.vn/vSjP4 https://archive.vn/vSjP4

idorosen 5y ago

Does anyone have any data on how much of this is actually due to the chip crunch versus reduced demand (especially at current iPhone 13 price points)? For business/enterprise, one effect of the pandemic WFH response has been suppressing tech refresh of cellphones at many large employers -- folks aren't traveling as much for business. I know leisure travel is getting back up to pre-pandemic times domestically in the US, but internationally it's still down overall, so maybe the average consumer use case for a new shiny iPhone is down as well? Also, annoyingly, Apple hasn't reintroduced fingerprint scanners (TouchID) to their phones like some others have, while at the same time FaceID continues not to work with face masks on. These and other anecdotes make me question whether this is cover for decreased demand, or at least decreased demand forecasts.

tonyedgecombe 5y ago
That doesn’t seem to match up with this: https://www.barrons.com/articles/apple-iphone-wait-times-multiyear-highs-51633962094 https://www.barrons.com/articles/apple-iphone-wait-times-mul...
Slippery_John 5y ago
That seems like it would be difficult data to gather. Reduced availability certainly can reduce demand by itself, somebody might give up if the thing isn't available after a while. I, for instance, would love to upgrade if I could get ahold of one of the things. If I still can't walk into a store and get one two months from now then I'll just wait it out another generation. > FaceID continues not to work with face masks on Well.... it does if you have an apple watch. I would still rather have a touch id option though.
- simonh 5y ago
  Given the long wait times for these things I think it's pretty clear this is a supply issue, not a demand issue. As for touch authentication, there's still the SE so at least they still have that as an option in the lineup. The thing is they begin the design outline for new iPhones from 24 to 18 months in advance of launch. Even a 2 year pandemic is a temporary issue relative to the iPhone design cycle, and any design response they might make to it would only show up towards the end of the crisis anyway.

pkpioneer 5y ago

How to Identify Objects with Your iPhone: https://pkpioneer.blogspot.com/2021/09/how-to-identify-objects-with-your-iphone.html https://pkpioneer.blogspot.com/2021/09/how-to-identify-objec...

mickjagger 5y ago

So this company has pretty much infinite money but they can’t get or make chips. Huh. Don’t know what to make of that.

Maakuth 5y ago
Well, they might be able to use some of that infinite money to build a chip factory of their own. However, it would take years to become online, so the situation is likely to be resolved until that anyway. And it would be very expensive indeed, as it seems to be extremely difficult and expensive even for companies that already are in the semi business, such as Intel.

mupuff1234 5y ago

I wish the major phone manufacturers would abandon the yearly release cycle for new models - it makes everything so much more boring and predictable. Not that it's ever gonna happen.

michelb 5y ago
I think multiple releases per year would be even less interesting as there would be much less to look forward to. I think phones have almost approached their final form, a slab of glass. The next 'innovation' could be a really good, thin folding model without a noticeable crease. I don't use my phone that much so I can't think of important, game-changing things I would like to see besides unrealistic battery-life expectations.
- diggan 5y ago
  I'd love it if manufacturers could go back to try to make mobile phones smaller again, at least for those with smaller hands (like me). It's almost impossible to find a feature phone that I can use with one hand and reach everywhere with my thumb. Latest phone is a iPhone 12 Mini, but CarPlay is so horrible (and important for me) that I'm looking for a good Android phone again (Android Auto is miles ahead of CarPlay), with the same size and good performance. But it's really hard to find good ones.
  - wffurr 5y ago
    Apparently the mini versions of the iPhone sold poorly enough that they won't produce a mini version of the iPhone 14, and instead will push the SE as their small sized phone. At this point, backing Kickstarter projects is likely the only way to get a small phone made.
    - deleted 5y ago
      [deleted]
  - iSnow 5y ago
    Same here, and now that my Sony Xperia Compact is now on life support, I will have to switch to iPhone. There is no Android phone maker left that produces something between the ultra-small Atom and what used to be called phablets. And even Apple seems to have a hard time selling smaller phones.

KptMarchewa 5y ago

If even Apple is affected, there's no hope for short or mid-term end of this.

laurent92 5y ago
Is this why they didn’t release the M2 during the keynote last month?
- michelb 5y ago
  I think that would be a commercial decision? Why introduce something way better right away? I expect the M-series macs to be milked just like they milked the iPhone chips. M1, M1s, M2, M2s, etc. Small incremental changes so they can keep selling. I Apple would introduce a radically faster M2(+much faster GPU) and >32Gb ram, with decent connectivity options, I would probably not buy another mac for 12 years again. I already use my macs a long time.
  - iSnow 5y ago
    We'll see next Monday, at least rumors are going wild already :)
- marcellus23 5y ago
  They were never going to do that. The September keynote is always about iPhones.

2OEH8eoCRo0 5y ago

Sounds like an excuse. Apple can afford to pay whatever price these chips are.

zepto 5y ago

Is there any evidence this is actually true? Literally every year at this time, Bloomberg or the WSJ reports that Apple is due to cut production due to some negative factor or another. So far it has always turned out to be complete bullshit. It’s pretty obvious that there are many parties who could benefit from such a rumor.

Strilanc 5y ago
Do you have a few examples?
- zepto 5y ago
  2020: https://www.wsj.com/articles/apple-delays-mass-production-of-2020-flagship-iphones-11587984138 https://www.wsj.com/articles/apple-delays-mass-production-of... 2019: https://asia.nikkei.com/Business/Companies/Exclusive-Apple-cuts-iPhone-production-plan-by-10 https://asia.nikkei.com/Business/Companies/Exclusive-Apple-c... 2018: https://www.theverge.com/2018/11/19/18102562/apple-production-order-cut-iphone-demand https://www.theverge.com/2018/11/19/18102562/apple-productio... 2017: https://www.techspot.com/news/71509-apple-slashes-iphone-8-production-according-supply-chain.html https://www.techspot.com/news/71509-apple-slashes-iphone-8-p... 2016: https://www.theguardian.com/technology/2016/jan/06/apple-shares-fall-reports-cuts-iphone-6s-plus-production https://www.theguardian.com/technology/2016/jan/06/apple-sha...
  - jjulius 5y ago
    >Literally every year at this time... At the risk of being pedantic, your 2020 link is from April 27th, 2019 link is from January 29th, and your 2016 link is from January 6th. Only two of five - 2017/18 - are from this time of year.
    - zepto 5y ago
      You are being pedantic. The time of year is not relevant to the point, and in any case 2 examples in addition to the current one is more than enough. There is a regular stream of these rumours which have proven to be empty so far. Perhaps the wolf will really come this time.

mensetmanusman 5y ago

This will hit earnings and could spark the next recession. Be ready for an interesting winter where people won’t be able to repair broken furnaces and will have to abandon homes. This could snowball infrastructure damage. Response to pandemic about to get wild?

Tagbert 5y ago
Panic!!!
ryan93 5y ago
Wrong

deleted 5y ago

[deleted]