The Chip Crunch Is Forcing Apple to Cannabilize iPad Production to Build More iPhones

After Tim Cook informed CNBC that the chip crunch doubtless price Apple round $6 billion in misplaced gross sales, it seems Apple has began taking extra drastic measures as a way to preserve robust manufacturing of the iPhone 13 and iPhone 13 Pro.

According to a brand new report from Nikkei Asia, sources declare Apple has lower the manufacturing of iPads by as much as 50% over the previous two months in order that it might use parts initially earmarked for iPads to construct extra iPhone 13s.

While the choice to chop iPad manufacturing is definitely not one Apple takes frivolously, as iPad gross sales have risen 6.7% this yr per the IDC, Apple is reportedly prioritizing iPhone 13 manufacturing as a consequence of forecasts for “stronger demand” in Western markets as individuals start to journey extra and restrictions concerning covid-19 begin to ease up in numerous international locations.

Also, with gross sales of iPhones traditionally maxing out shortly after launch (the iPhone 13 went on sale in late September), Apple is nearly definitely attempting to take care of a gentle provide of recent iPhones whereas demand is highest. And with present iPhones and iPads sharing a lot of the identical base parts, it’s simpler for Apple to reallocate components from iPad manufacturing quite than attempting to supply new parts from exterior or repurpose components from different units like AirPods or the Apple Watch.

And with anticipated shipments of the iPhone 13 slated to be as excessive as 200 million this yr in comparison with round 50 million for brand new iPads, it’s not exhausting to see why Apple may wish to prioritize the manufacturing of its hottest telephone.

However, with Google presumably eyeing a return to the pill house following the information about Android 12L, Apple might quickly be dealing with some elevated competitors for the iPad. With supply dates for a lot of new iPads (significantly these with upgraded storage) together with the brand new iPad Mini having already been pushed again to December, new iPad patrons are already feeling the squeeze attributable to Apple’s latest shift in priorities.

Perhaps the larger affect attributable to international provide points is that after claiming to lose out on $6 billion in potential gross sales final quarter, Tim Cook mentioned the chip crunch may trigger even greater gross sales woes this quarter, which covers the vacation shopping for season and is usually Apple’s largest quarter of the yr.