Chip shortages took $6bn bite out of Apple's top line

No need to panic, Cupertino still pulling in a $1bn a day in revenue


Apple's lost $6bn in revenue during its last financial quarter of 2021 due to chip shortages and supply constraints, and the impact will be even more severe in the coming months.

"We estimate the impact from supply constraints will be larger during the December quarter," said Luca Maestri, chief financial officer, during an earnings call on Thursday.

Apple's stock price fell nearly 5 per cent at the news, despite Cupertino reporting a record quarterly revenue of $83.4bn. Analysts had been expecting a figure much closer to $85bn, so those $6bn in lost sales have proved very pricey indeed on Wall Street.

Later in the call, CEO Tim Cook said chip shortages have been affecting the iPhone, the iPad and the Mac products. The company had no issues getting cutting-edge chips made from some locations, but had issues getting supplies from "legacy nodes" in places like Southeast Asia, which suffered from pandemic-related delays.

Apple's latest Mac and iPhone chips are made by Taiwan Semiconductor Manufacturing Co using the 5nm process.

"On legacy nodes, we compete with many different companies for supply. And it's difficult to forecast when those things will balance because you'd have to [know] how the economy is going to be in 2022," Cook said.

IDC analyst Ryan Reith told The Register that the supply-chain challenge on the legacy node is around components like power management integrated circuits, display driver components, and even USB-C parts. These are made in "mom-and-pop" factories with limited operations and no concerns about upgrading factories.

"We expect revenue for each product category to grow on a year over year basis except for iPad, which we expect to decline year over year due to supply constraints," Apple's Maestri said.

Despite this challenge, the company is seeing big demand for its products, Cook said.

The fourth quarter and year-end results [PDF] are as follows:

Revenue for the quarter was a record $83.4bn, up 29 per cent year on year. For the year Apple pulled in $366bn, a touch over a billion a day.

Net income was $20.6bn of the three months up to September, up from $12.7bn this time last year. For the full year Apple reported profits nearly doubling to $94.7bn.

Earnings per share were in line with analysts' expectations, at $1.24 for the quarter and $5.61 for the year. ®

Similar topics


Other stories you might like

  • Meg Whitman – former HP and eBay CEO – nominated as US ambassador to Kenya

    Donated $110K to Democrats in recent years

    United States president Joe Biden has announced his intention to nominate former HPE and eBay CEO Meg Whitman as Ambassador Extraordinary and Plenipotentiary to the Republic of Kenya.

    The Biden administration's announcement of the planned nomination reminds us that Whitman has served as CEO of eBay, Hewlett Packard Enterprise, and Quibi. Whitman also serves on the boards of Procter & Gamble, and General Motors.

    The announcement doesn't remind readers that Whitman has form as a Republican politician – she ran for governor of California in 2010, then backed the GOP's Mitt Romney in his 2008 and 2012 bids for the presidency. She later switched political allegiance and backed the presidential campaigns of both Hillary Clinton and Joe Biden.

    Continue reading
  • Ex-Qualcomm Snapdragon chief turns CEO at AI chip startup MemryX

    Meet the new boss

    A former executive leading Qualcomm's Snapdragon computing platforms has departed the company to become CEO at an AI chip startup.

    Keith Kressin will lead product commercialization for MemryX, which was founded in 2019 and makes memory-intensive AI chiplets.

    The company is now out of stealth mode and will soon commercially ship its AI chips to non-tech customers. The company was testing early generations of its chips with industries including auto and robotics.

    Continue reading
  • Aircraft can't land safely due to interference with upcoming 5G C-band broadband service

    Expect flight delays and diversions, US Federal Aviation Administation warns

    The new 5G C-band wireless broadband service expected to rollout on 5 January 2022 in the US will disrupt local radio signals and make it difficult for airplanes to land safely in harsh weather conditions, according to the Federal Aviation Administration.

    Pilots rely on radio altimeter readings to figure out when and where an aircraft should carry out a series of operations to prepare for touchdown. But the upcoming 5G C-band service beaming from cell towers threatens to interfere with these signals, the FAA warned in two reports.

    Flights may have to be delayed or restricted at certain airports as the new broadband service comes into effect next year. The change could affect some 6,834 airplanes and 1,828 helicopters. The cost to operators is expected to be $580,890.

    Continue reading

Biting the hand that feeds IT © 1998–2021