Apple AAPL is the latest victim of a global chip shortage. The iPhone maker has reportedly postponed production of some of its Macs and iPads due to chip shortages, while supplies of some iPhone components remain limited, according to Reuters citing a Nikkei report.
The shortage of chips has become a bottleneck in a variety of industries, including automotive, home appliances, and smartphones.
The waves of work from home and online learning caused by the coronavirus have driven high demand for laptops, smartphones, game consoles and electronic products, leading to congestion in supply lines. (More: Global Chip Shortage – Temporary Problem, But In Extreme Times)
This, along with US sanctions against Chinese tech companies, further exacerbated the supply shortage. Apple supplier Foxconn expects a 10% decline in exports due to a shortage of computer chips in the world.
Price and Consensus Apple Inc.
Apple Inc. consensus price chart | Quote Apple Inc.
It is noteworthy that the lack of components forced Apple to postpone some orders for Mac and iPad from the first half of this year to the second half.
Portfolio strength drives revenue growth
While the chip shortage is an obstacle for Apple, it is not expected to affect the product’s availability to consumers, at least not in the near future.
Apple has undoubtedly benefited from the strong iPad and Mac sales caused by the coronavirus. The company is heavily dependent on its flagship product, the iPhone, for growth. The success of the latest iPad and Mac models bodes well for portfolio expansion, which bodes well for growth prospects.
Rumors have it that Apple will release an updated iPad Pro lineup with an updated processor similar to the in-house-designed M1 processor found in the latest MacBook Air, MacBook Pro, and Mac mini.
What’s more, Apple continues to dominate the wearable market with the latest Apple Watch 6. According to the latest IDC data, global wearable device shipments increased 27.2% year-on-year to 153.5 million in the fourth quarter of 2020.
Apple wearable shipments peaked at 55.6 million, up 27.2% year-on-year, thanks to strong rollout of Apple Watch Series 6, Watch SE and Series 3. What’s more, market share remained in the fourth quarter of 2020 at the level of 36.2%.
Demand for wearables is expected to remain strong in 2021 thanks to the growing demand for health monitoring and teleworking.
In addition, the company is reportedly planning to release Air Tags or Apple Tags (ultra-wideband trackers), as well as a number of products. Other Apple products slated for 2021 include a new pair of AirPods and silicone Macs.
Apple is also expected to release its first virtual reality (“VR”) headset in 2022. The iPhone maker’s exit will increase competition in the VR market, which includes devices such as FacebookFB Oculus Quest 2, SonySNE PlayStation VR, MicrosoftMSFT Windows Mixed Reality and HTC Vive and Vive Pro.
What’s more, this Zacks Rank # 3 (Hold) company is reportedly working on augmented reality (“AR”) projects to expand its presence in the booming AR market, and is expected to release its AR devices by 2023. See the full list of today’s Zacks # 1 (Strong Buy) stocks here.
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