The holiday season is the ideal time for companies like Apple to sell products in droves, including the iPhone. Unfortunately, as the company indicated through a press release concerning the imminent shortage, analysts predict that despite Apple's ferocious command of its supply chain, the latest models will continue to remain in short supply. This can also indicate that customers will experience longer wait times for their shiny new iPhone 14 to reach their doorstep.
Increasing Lead Times of iPhone 14 Pro and iPhone 14 Pro Max Indicate That Supply Shortfalls Are Persistent
Earlier, there were reports stating that Foxconn's Zhengzhou iPhone assembling in China was facing lockdowns due to the COVID-19 restrictions, which naturally impacted iPhone 14 Pro and iPhone 14 Pro Max shipments. According to an investors' note spotted by AppleInsider, JP Morgan analysts state that while it is difficult to determine the affected shipments due to the operational restrictions placed on the factory, there are other ways to figure out if there is a supply shortage, and that is increasing lead times.
The longer that customers need to wait to receive their iPhone 14 Pro or iPhone 14 Pro Max, the higher the lead time, which would indicate that there is a disparity between supply and demand. Sadly, Apple has been unable to overcome these mounting obstacles and will likely ship fewer iPhone 14 models than it previously intended to. Where the Cupertino firm initially had plans to ship 90 million by the end of 2022, that forecast has changed to 87 million units, marking a drop of 3 million units.
Assuming that the average selling price (ASP) of these 3 million iPhones was $800, Apple would lose $240 million in revenue or nearly a quarter of a billion dollars. However, JP Morgan has varying statistics on Apple's shipment forecast for the year, believing the company will end up with 74 million units for the period, down from 82 million. Apple is currently working to diversify its supply chain by shifting some of its production to Vietnam and India.
Even with the current output, both countries are still inferior to Foxconn's assembling plant in China, so it will take a few years before Apple completely severs its dependency from the region.
News Source: AppleInsider