Apple’s supply crunch delivers US$6 billion blow amid strong iPhone 13 sales

Apple’s iPhone sales soared yet again in the past quarter, but did not grow as rapidly as analysts anticipated because of supply shortages that have made it more difficult to meet the demand for a wide range of products.

Until recently, the supply shortages that have curtailed production of everything from automobiles to video game consoles have not been a major problem for Apple. Although the company’s quarterly results released on Thursday served as evidence of its products’ continuing success, they also showed Apple is not immune to the supply headaches.

The company earned US$20.6 billion, or US$1.24 per share, during the July-September period, a 62 per cent increase from the same time last year. Revenue climbed 29 per cent from the same time last year to US$83.4 billion.

While the earnings matched the estimates of Wall Street analysts that sway investors, the revenue fell below analyst projections of roughly US$85 billion for the quarter, according to FactSet Research.

In a conference call with analysts, Apple CEO Tim Cook estimated supply shortages cost the company about US$6 billion in sales during the quarter. The company’s chief financial officer, Luca Maestri, warned sales will be hurt even more during the current quarter that covers the pivotal holiday shopping season.

That sobering reality likely was the main reason that Apple’s stock price declined by more than 3 per cent in extended trading after the numbers came out.

“It’s not a demand issue but a supply issue that continues to be the elephant in the room for Apple,” Wedbush Securities analyst Dan Ives wrote in a research note.

As usual, the iPhone remained Apple’s financial engine, with sales of the device rising 47 per cent from last year to US$38.9 billion for the quarter. But analysts had predicted iPhone sales of roughly US$41 billion for the quarter.