Apple is said to only be making 220 million units this year which is a major step back from its growth scale. According to the analysts, this year's production rate is almost as much as 20 million lower than the demand.
Although the pandemic was a major crisis for people all around the world and had a huge impact on all kinds of businesses, Apple never failed to break records. It always reaches new heights when it comes to selling technology with a year-on-year revenue of up to 5.5%. This is why this year has proven to be rather slow for the company where even the production is quite slippery slope.
The reason behind the slow production is certainly not lower demand. According to the census, Apple's demand has risen by a huge margin since last year. What has changed is that now there are certain obstacles in the production of the iPhone 14 that weren't there previously.
The first problem, probably the most major one, is the shortage of chips. The shortage is caused by multiple reasons, the first being the pandemic. Covid has led to a shortage in the supply of technology. Majorly in China, where city-wide lockdown has delayed all kinds of productions.
Secondly, with more technology being used in the pandemic, the demand has shot up, with more chips being consumed globally. The automobile industry is also increasing its demand for more and more chips every day. What's astonishing is that it's not even the major chips that the company needs, it is the minor chips for low-grade processing which are running out. It is said that the iPhone 14 production is already a month behind its schedule. Furthermore, with the great inflation, it is impossible to generate enough revenue to be spent on creating new gadgets.
Due to these reasons and multiple others, Apple had to make the unfortunate decision of bringing down the production from the estimated 240 million to 220 million this year. The drop in the production is already causing the shares to drop as well. Although Apple had already warned that the revenue will drop by almost as much as 8 billion, we still have to see whether Apple will be able to take the toll or not.
Read next: Study Shows Google Collects Most Data Out of All Big Tech Companies
Although the pandemic was a major crisis for people all around the world and had a huge impact on all kinds of businesses, Apple never failed to break records. It always reaches new heights when it comes to selling technology with a year-on-year revenue of up to 5.5%. This is why this year has proven to be rather slow for the company where even the production is quite slippery slope.
The reason behind the slow production is certainly not lower demand. According to the census, Apple's demand has risen by a huge margin since last year. What has changed is that now there are certain obstacles in the production of the iPhone 14 that weren't there previously.
The first problem, probably the most major one, is the shortage of chips. The shortage is caused by multiple reasons, the first being the pandemic. Covid has led to a shortage in the supply of technology. Majorly in China, where city-wide lockdown has delayed all kinds of productions.
Secondly, with more technology being used in the pandemic, the demand has shot up, with more chips being consumed globally. The automobile industry is also increasing its demand for more and more chips every day. What's astonishing is that it's not even the major chips that the company needs, it is the minor chips for low-grade processing which are running out. It is said that the iPhone 14 production is already a month behind its schedule. Furthermore, with the great inflation, it is impossible to generate enough revenue to be spent on creating new gadgets.
Due to these reasons and multiple others, Apple had to make the unfortunate decision of bringing down the production from the estimated 240 million to 220 million this year. The drop in the production is already causing the shares to drop as well. Although Apple had already warned that the revenue will drop by almost as much as 8 billion, we still have to see whether Apple will be able to take the toll or not.
Read next: Study Shows Google Collects Most Data Out of All Big Tech Companies
