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Chip Shortage Begins to Affect Apple iPhone Production

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The global chip shortage has officially begun to affect the production of iPhones, according to Apple executives. While Apple previously already stated that the global chip shortage has affected their Mac and iPad production process, the shortage has now begun to affect iPhones, which could affect their overall revenue growth for the year. Already, shares have been lower upon learning this news.

While this latest news has made Apple forecast slower revenue growth, they still believe their revenue will grow by double digits in the fourth quarter. However, executives also state that it will more than likely be below the third-quarter growth rate. Apple’s announced a 36.4% growth rate for the third quarter, so the fourth quarter will more than likely be below this rate.

However, there is some good news out of this. Apple did announce that the chip shortage hasn’t actually affected their revenue or production cycle in the third quarter as much as they initially expected. As this shortage is now going to affect their production of iPhones, however, things may change in the fourth quarter. 

Apple isn’t the only major company dealing with chip shortages. The auto industry as a whole is currently attempting to solve a global semiconductor chip shortage which has affected their ability to manufacture cars. As a result, the price of cars has surged, and the consumer demand for new cars has slowed down. 

There’s no telling how this will affect Apple, which has been dealing with a surge in consumer demand, just like so many other businesses. As a result of this surge in demand, it’s been difficult for the company to stock up on items and parts, which has now left them in a shortage, according to Apple executives. 

The total revenue for Apple this year has hit $81.43 billion. Initially, analysts forecasted revenue of $73.30 billion, so the company has already done better than expected. Third-quarter sales also beat initial forecasts. 

The global chip shortage will more than likely only continue to affect businesses such as Apple, however. While some countries and officials have attempted to solve this problem, the chip shortage is still affecting so many. While the initial lessening of COVID-19 pandemic regulations was thought to possibly help the production of the chips move along, fears over the new Delta variant of the virus could begin to affect businesses.

Already, the CDC in the United States has reversed course and begun to recommend that vaccinated Americans wear masks again while indoors. While most economists don’t foresee another lockdown like many faced in 2020, regulations may be put back in place if the Delta variant continues to spread. 

However, Apple does continue to have high forecasts and the company as a whole has continued to grow. As they continue to deal with the chip shortage, they may have to emphasize other products, rather than the iPhone, as they work to keep on top of demand. Other companies in a similar position will also have to learn how to work around this shortage, as it doesn’t appear as if the shortage will be going away overnight, or any time soon. 

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