Apple expects its supply constraints will ease by March, 2022

Like the entire tech industry, Apple was impacted by the global chip crisis which began in 2020. Although the tech giant has recorded consecutive successful earnings quarters since Q2, 2020, the company lost billions of dollars in revenue due to COVID-19 related production issues and chip shortage. However, Apple expects that things will improve in a couple of months.

Apple and RED

In an interview with The Washington Street Journal, the company’s CEO said that supply constraints are going to ease in March this year and expect the company to have another remarkable quarter in March, Q2, 2022. 

For Q4, 2021, Apple reported a $6 billion loss due to supply constraints but despite the odds, the company generated $83.4 billion revenue with 47% Y-o-Y growth. At the following earnings conference, the CEO Tim Cook shared that Apple expected more than $6 billion loss in revenue for Q1, 2022 (October – December 2021 quarter) due to high demand and supply constraints. 

Apple expects better earnings reports in the upcoming March quarter 

Recently, Apple announced its financial results for the first quarter of 2022 with $123.9 billion in revenue, the company saw 11% Year-on-Year growth and quarterly earnings per diluted share of $2.10. Although its sales revenue set a new all-time high for the company, the tech giant expects even better performance in March, Q2, 2022.

Commenting on supply constraints, Mr. Cook said that issues affected the company’s entire product lineup but he forecasts that the issues will be less problematic for Apple in the upcoming quarter. In Spring, the tech giant might launch new MacBook Air, 27-inch iMac, and iPhone SE (3rd generation)

“We saw supply constraints across most of our products. We’re forecasting that we will be less [constrained] in March than we were in the December quarter.

“We’re not projecting that. You need to know a lot of things to be able to make an accurate forecast there, like how are other people’s demands in addition to what kind of supply we can squeeze out.”

Apple Tim Cook

At the Q1, 2022, earnings call, CFO Luca Maestri also shared the same expectation for the upcoming March quarter. 

We expect to achieve solid year over year revenue growth and set a March quarter revenue record despite significant supply constraints, which we estimate to be less than what we experienced during the December quarter.

Reportedly, the tech giant maintained a better iPhone 13 supply by cutting down iPad’s production by 50% to utilize common parts in smartphones production. In the Holiday quarter, all products saw growth except for iPad which saw a decline in sales from $8.435 in Q1, 2021 billion to $7.248 billion in Q1, 2022. 

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Addicted to social media and in love with iPhone, started blogging as a hobby. And now it's my passion for every day is a new learning experience. Hopefully, manufacturers will continue to use innovative solutions and we will keep on letting you know about them.

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