Nikkei Does Deep Dive Into Apple's 'Nightmare Before Christmas' Supply Chain Issues

At the beginning of October when device production typically ramps up, Apple cut iPhone and iPad assembly for several days because of supply chain constraints and "restrictions on the use of power in China," reports Nikkei.

iphone 13 pro max display bleen
In a detailed report on Apple's ‌iPhone‌ production woes, Nikkei says that Foxconn, Pegatron, and other Apple suppliers ramped down on production for the first time in more than a decade, with workers getting time off rather than overtime hours as is typical.

"Due to limited components and chips, it made no sense to work overtime on holidays and give extra pay for front-line workers," a supply chain manager involved told Nikkei Asia. "That has never happened before. The Chinese golden holiday in the past was always the most hustling time when all of the assemblers were gearing up for production."

According to Apple CEO Tim Cook, supply constraints around the time of the ‌iPhone‌ launch cost Apple more than $6 billion. Cook cited chip shortages as one of the reasons for the supply issues, and while Apple uses leading edge nodes that are not affected by ongoing issues with chip availability, other manufacturers that create components for Apple devices have been impacted.

October reports said that Apple cut its 2021 ‌iPhone‌ production goals by more than 10 million units after Broadcom and Texas Instruments were unable to deliver enough components. The lack of even a single tiny component for the ‌iPhone‌ can impact production, and there are a lot of moving parts for Apple to deal with.

Nikkei did a deep dive into Apple's supply issues, interviewing more than 20 industry executives to see what went wrong. Apple reallocated components from iPads and older iPhones like the ‌iPhone‌ 12 to the new iPhone 13 models, but production was still 20 percent short of where Apple wanted to be because of power restrictions in China, lockdowns in Vietnam and Malaysia, and supply bottlenecks caused by skyrocketing demand for chips.

The reallocation hit ‌iPad‌ production hard and Apple produced 50 percent fewer devices than planned, with shortages on the tablets lasting well into November. With many ‌iPad‌ models in short supply, customers who order now won't be able to get a device in time for Christmas as delivery already extends into January.

According to Bloomberg, Apple recently informed its suppliers that interest in the ‌iPhone‌ is slowing ahead of the holidays, which could be due to the long wait times for new devices in September and October. Apple planned to make up for the supply constraints in early 2022 when manufacturing issues were ironed out, but Bloomberg claims Apple may not end up getting the necessary orders from customers.

Sources that spoke to Nikkei painted a different picture, and said that Apple has asked suppliers to reaccelerate ‌iPhone‌ production in November, December, and January. An Apple component supplier told Nikkei that Apple has reassured them that demand has persisted and that Apple has postponed orders to a later period because of supply constraints, so it's not clear which take is accurate.

Nikkei's full exploration into Apple's supply chain and what led to the company's current situation with chip shortages and production delays is well worth reading.

Popular Stories

iOS 18 CarPlay Feature

iOS 18 Adds These 5 New Features to CarPlay

Thursday June 13, 2024 7:44 am PDT by
Apple did not mention CarPlay during its WWDC keynote this week, but iOS 18 includes a handful of new features for the in-car software. Overall, there is not a whole lot new for CarPlay on iOS 18, with changes seemingly limited to the Messages and Settings apps so far. Below, we recap everything new for CarPlay on iOS 18. New for CarPlay on iOS 18 1. Contact Photos in Messages App...
ios 18 button bulge

iOS 18 Adds Pop-Out Bezel Animation When Pressing iPhone Buttons

Tuesday June 11, 2024 10:40 am PDT by
iOS 18 includes a small but interesting change for the buttons on the iPhone, adding more of a visual element when changing volume, activating the Action button, or locking the screen. When you press an iPhone button in iOS 18, the display bezel bulges outward slightly. This feature is available for the volume buttons, Action button and the power button, and it will also likely be used for...
iOS 18 Mock iPhone 16 Feature Gray

Revealed: iOS 18 Works With These iPhone Models

Monday June 10, 2024 3:57 am PDT by
iOS 18 will be compatible with the same iPhone models as iOS 17, according to a post on X today from a private account with a proven track record of sharing build numbers for upcoming iOS updates. iOS 18 will be compatible with the iPhone XR, and hence also the iPhone XS and iPhone XS Max models with the same A12 Bionic chip, but older iPhone models will miss out. Here is the full...
maxresdefault

First Look at Messages via Satellite in iOS 18

Thursday June 13, 2024 11:29 am PDT by
Apple has been gradually expanding its suite of satellite connectivity features for iPhone, and iOS 18 brings a significant new one in the form of Messages via satellite. The feature allows users to send and receive iMessages and SMS texts, including emoji and Tapbacks, while out of range of cellular and Wi-Fi networks. CNET met up with Apple's senior director of platform product marketing,...
iOS 18 Siri Integrated Feature

Massive iPhone Upgrade Coming This Week But These Devices Will Miss Out

Sunday June 9, 2024 1:25 pm PDT by
Apple is planning a major AI overhaul in iOS 18, with a feature set it is referring to as "Apple Intelligence." However, these new features will not work on older iPhones, even if they do appear on the new operating system's device compatibility list. Apple's initial AI roadmap for iOS 18 is said to come in two parts: Basic AI features that will be processed on-device, and more advanced...
Generic iOS 18 Feature Real Mock

Your iPhone 15 Can Show the Time When It's Out of Battery in iOS 18

Wednesday June 12, 2024 2:57 pm PDT by
The iPhone has had a Power Reserve function that holds back a small amount of battery life to allow features like Find My and NFC unlocking to work even when your device has died, and in iOS 18, Apple seems to be improving the feature further for the iPhone 15 models. As demonstrated on Reddit, when the battery on an iPhone running iOS 18 is exhausted, the phone can continue to show the time ...

Top Rated Comments

SonOfaMac Avatar
33 months ago
Even Apple with its world leading logistics and planning is not immune from the current shortages.
Score: 5 Votes (Like | Disagree)
GMShadow Avatar
33 months ago

With many iPad models in short supply, customers who order now won't be able to get a device in time for Christmas as delivery already extends into January.
Has for a little while, honestly. I'm mid January on an engraved 256GB Purple Mini 6, but non-engraved was only a few days quicker, and I ordered in November.

I still check the order status daily hoping for some kind of miracle. :D
Score: 5 Votes (Like | Disagree)
dannys1 Avatar
33 months ago

Sounds like stock manipulation or a slow news day so let’s make up a story about one of the world’s biggest companies to get clicks.
As someone who runs an Apple business I can guarantee you it's not made up - the supply issues are an absolute nightmare at the minute.
Score: 4 Votes (Like | Disagree)
tomsop Avatar
33 months ago
Here is the solution - we all need to as a society take a break at this pace of over consumption - we deal with the supply contstraints by reducing our own demand. It will balance out if we change our behavior but will persist until it is so annoying and disheartening that price and delay cause this to happen naturally anyway.
Score: 3 Votes (Like | Disagree)
Think|Different Avatar
33 months ago
No end in sight, sadly. And don't forget – this is affecting everyone.
Score: 3 Votes (Like | Disagree)
ThunderSkunk Avatar
33 months ago
In other news, we had a drier season than expected and everyone said all our crop yields would be down, and now all our crop yields are down. Our reporter interviewed twenty farmers, demanding to know why bad things happen and everything isn't as spectacular as some shareholders somewhere imagine it could possibly be 100% of the time.

Jeez.
Score: 2 Votes (Like | Disagree)