Tim Cook warns of Apple product shortages

Technology

Apple has warned of potential product shortages later in the year.

A computer-chip shortage has been accelerated primarily by pandemic-driven disruptions over the year.

Industries around the world are struggling to meet a surge in demand for products such as cars, high-tech gadgets and smartphones.

Apple chief executive Tim Cook says supply issues could affect products that feature its own M1 chip, which include the new iPad Pro and iMac 2021.

The shortage could threaten Apple’s profits, which it revealed on Wednesday were up 54% year-on-year.

“We expect to be supply-gated, not demand-gated,” said Cook to analysts.

“The shortages primarily affect ‌iPad‌ and Mac.

“We have a good handle on our demand – but what everybody else is doing, I don’t know.

“We will do our best, that’s what I can tell you.”

It would be “very, very difficult” to predict when the shortages would end, added Cook.

The big cost of chip manufacturing facilities means they operate at near full capacity, so it will take time to meet the increased demand.

“While manufacturers and business scramble to try and solve the shortage in semiconductors, the current issues can be traced back to 2018 and the beginning of the US-China trade war,” said Ben Barringer, equity research analyst at Quilter Cheviot.

“This has simply been exacerbated by the Covid crisis as companies look to meet the surge in demand they are experiencing or are about to go through as economies open up.”

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