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Apple problems: iPhone production stopped for the first time

Apple problems: iPhone production stopped for the first time

IPhone 13 (free photo)

Those hoping to renew this holiday season with a new smartphone made by Apple may be severely disappointed: unlike normal years, when iPhone production accelerated this season, this year, for the first time since the launch of the first iPhone in 2007 – almost 15 years – production lines closed in time, which most people want to buy.

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According to a report by the Japanese industrial newspaper Nikkei, in the past two months Foxcon and Pegatron, Apple’s two largest device contractors and most of the world’s largest electronics companies, have been forced to close factories for days, in instead of hiring more staff. double shift workers, 24 hours a day, 7 days a week. Even existing workers were given vacations during “Golden Week,” a Chinese national holiday to mark the harvest season, which parallels the Sukkot holiday.

“Due to a limitation in components and chips, it did not make sense to work overtime during vacations and provide additional pay to front-line employees,” he told a senior website at one of the companies. “This has never happened before. In the past, the Chinese gold (week) holiday was always the most stressful period, when all the ingredients accelerated production.”

Nikkei cites a number of reasons for what appears to be a true economic catastrophe: power outages in China due to the inability to meet the country’s electricity consumption, closures in Vietnam and Malaysia, where many components are produced, shortages of certain components, especially small components from lesser known manufacturers – from large manufacturers and inability to make devices without all the components together. For example, the processor, which costs around $ 45 and is made by TSMC, the display, which costs more than $ 100 and is made by Samsung and LG, and memory chips produced primarily by Samsung, are made at speeds that It could have been enough, but their shipments are delayed due to the global supply chain crisis, which is causing a “chain reaction.”

Serious consequences of the crisis: The production of the iPhone 13 series fell by 20% in October compared to expectations, the production of previous iPhone models that are still sold at lower prices fell by 25% and the production of the iPad was cut in half. . Currently, it is estimated that Apple will be able to produce just 83-85 million iPhone 13 devices this year, compared to 95 million expected, and a total of 215 million iPhone series devices compared to the plan to produce and sell 230. millions of this type. devices this year.

These figures are particularly shocking when compared to the previous situation: in the first nine months of the year there was a 30% jump in iPhone sales compared to the same period of 2020, due to the great uncertainty in the first year of the crisis of the crown. that made people choose cheaper devices. Later that came this year. Already in the presentation of the latest Apple reports, CEO Tim Cook admitted that the crisis reduced the company’s revenue by $ 3-4 billion in the second quarter and by $ 6 billion in the third quarter.

Apple declined to comment for this report.

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