Apple Warns of Product Shortages

The Covid-19 pandemic has affected many companies, from established companies, SMEs to start-ups. Apple, a leading tech company, is no different. According to its CEO -Tim Cook, Apple is facing the likelihood of product shortage in the future. Cook said that “supply issues could affect products that feature its M1 chip including its new iPad Pro and iMac 2021.”

The computer chip shortage has been highly accelerated by the pandemic global disruptions over the past year. This has led to most industries struggling to increase demand for high-end products such as cars and high-end gadgets. For Apple, the shortages primarily affected the iPad and Mac.

“We expect to be supply-gated, not demand-gated,” Cook told analysts, adding that “it would be very difficult to predict when the shortages would end.”

It’s expected that the shortage in supply will affect profit margins for Apple, which is currently approximated at 54 percent.  However, the shortage cannot be entirely blamed on Covid-19, with the USA- China trade wars from 2018 playing a role.

It’s unclear when the shortage will end since there’s an increase in demand for the products and it will be higher as economies open up.  Besides, Apple has increased its sales over the pandemic as most people resulted to working and learning online. Being home also saw people seeking entertainment online with most of them upgrading to the new Apple 5G products.

By John Jim