Apple lost $6 billion to chip shortage and manufacturing delays in Q4, Tim Cook says

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Apple today posted strong earnings for its fourth fiscal 2021 quarter, reporting all-time highs for its services and Mac divisions. The company says it took in revenue of $83.4 billion, a year-over-year increase of 29 percent, and earnings per share of $1.24. That earnings number came in below Wall Street expectations of $84.85 billion.

CEO Tim Cook told CNBC that supply chain constraints had a clear impact on financial results this quarter. “We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion,” Cook said, attributing the supply issues to “the industry-wide chip shortages that have been talked about a lot and COVID-related manufacturing disruptions in Southeast Asia.” Apple expects an even greater loss from supply chain issues in the December quarter, it said during Thursday’s earnings call.
 

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Major iPhone supplier Foxconn says that it expects the ongoing chip shortage to continue well into the second half of next year, prolonging struggles of manufacturers, including Apple, to keep up with consumer demand, The Wall Street Journal reports.

Apple has been dealing with the chip shortage for the past several quarters, but it only started significantly impacting Apple’s business in the most recent quarter. The shortage of specific components and production constraints related to the ongoing public health crisis have impacted ‌iPhone‌, iPad, Apple Watch, and Mac availability. Apple said that this past quarter, the shortages cost it $6 billion, and it expects the impact to be even more significant for the holiday season.

Foxconn is Apple's largest supplier for the ‌iPhone‌, and while some reports suggest that production is improving, it's still a length away from being entirely normal. As the holiday season approaches, Apple is encouraging customers to get their holiday orders in early to ensure they receive them in time for the holidays, and the company has provided "order by" dates for some of its most popular products.