Apple predicts bleak holiday sales season due to spotty supplies

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Supply concatenation woes cost Apple $6 cardinal successful income during the company’s fiscal 4th quarter, which missed Wall Street expectations, and Chief Executive Tim Cook said that the interaction volition beryllium adjacent worse during the existent vacation income quarter.

Cook told Reuters connected Thursday the 4th ended Sept. 25 had “larger than expected proviso constraints” arsenic good arsenic pandemic-related manufacturing disruptions successful Southeast Asia. While Apple had seen “significant improvement” by precocious October successful those Southeast Asian facilities, the spot shortage has persisted and is present affecting “most of our products,” Cook said.

“We’re doing everything we tin bash to get much (chips) and besides everything we tin bash operationally to marque definite we’re moving conscionable arsenic accelerated arsenic possible,” Cook said.

Cook said the institution expects year-over-growth for its 4th ending successful December. Analysts expect maturation of 7.4% to $119.7 billion.

“We’re projecting precise coagulated request maturation twelvemonth implicit year. But we are besides predicting that we’re going to beryllium abbreviated of request by larger than $6 billion,” Cook said.

Shares of the Cupertino, California-based company, which had risen astir 15% this year, slumped 5% successful extended trading connected Thursday. The dip in Apple shares could marque Microsoft Corp the world’s astir invaluable institution aft a run-up successful Microsoft shares connected the spot of its unreality computing business.

A gloved manus  holds a semiconductor spot   successful  this photograph  illustrationAn ongoing worldwide shortage of semiconductor chips is contributing to a shortage successful Apple products.U. Baumgarten via Getty Images

Apple’s results were mixed successful a fiscal 4th fourth seen arsenic a lull earlier the high-sales vacation extremity of year.

Apple said revenues and profits for the fiscal 4th fourth were $83.4 cardinal and $1.24 per share, compared with expert estimates of $84.8 cardinal and $1.24 per share, according to IBES information from Refinitiv.

The results were a rocky extremity to a fiscal twelvemonth of above-expectations income led by its iPhone 12 models and beardown income of Mac computers and iPads for moving and learning from location during the COVID-19 pandemic.

Tim Cook connected  signifier    with a immense  photograph  of an array of colorful iPhones down  himApple reported revenues and profits were down by a small implicit a cardinal dollars compared with the aforesaid clip successful 2020.Getty Images

Apple told investors successful July that spot constraints would commencement to deed its iPhone and iPad lineups for the archetypal clip successful the 4th quarter.

Apple posted its results soon aft retailer Amazon forecast holiday-quarter sales good beneath Wall Street expectations, citing labour proviso shortages and planetary proviso concatenation issues successful part.

Sales of caller 2021 iPhones sag

Apple missed expectations successful 2 cardinal categories. Apple said fourth-quarter iPhone income were $38.9 billion, abbreviated of estimates of $41.5 billion, according to Refinitiv data.

Cook said that chips made with older exertion stay the cardinal proviso constraint. He said that Apple remains unsure whether the shortages volition easiness aft the vacation buying season.

People are seen trying retired  iPhone 13s wrong  an Apple storeApple reported a slump successful income of iPhones successful its fiscal 2021 4th quarter.SOPA Images/LightRocket via Getty Images

“Most of what we plan are leading-edge (chip manufacturing) nodes, but each of the products person immoderate bequest node components successful them arsenic well. And truthful that (shortage) continues into (fiscal) Q1, and we’ll spot what it looks similar beyond that. It’s precise hard to call,” Cook told Reuters.

The company’s accessories segment, which contains fast-growing categories similar its AirPods wireless headphones, came successful astatine $8.8 billion, fractional a cardinal dollars little than expert expectations of $9.3 billion, according to Refinitiv data.

Other segments fared better. Sales for iPads and Macs were $8.3 cardinal and $9.2 billion, compared with expert estimates of $7.2 cardinal and $9.2 billion, according to Refinitiv data.

Display of iPhone 13 Pro MaxApple remains unsure whether the shortages volition easiness aft the vacation buying season.Getty Images

The company’s services conception – which contains its App Store concern – had income of $18.3 cardinal successful revenue, up 26%, compared with expert expectations of $17.6 billion. Cook told Reuters that Apple now has 745 cardinal paid subscribers to its platform, up from the 700 cardinal it disclosed a 4th ago.

Another agleam spot successful the company’s results were its income successful China, which were up 83% to $14.6 billion.

The institution said it returned $24 cardinal to shareholders during the quarter.