Entering 2022: Apple Experiences Bigger Supply Problems

Source: tempo.com


Apple estimates that the company will have bigger supply-related problems due to the Covid-19 lockdown in China, which is a key provider of supplying Apple products, and the cessation of product sales due to the Russian invasion of Russia. The company predicts that there will be a slowdown in the company’s growth due to these problems which will eventually result in a decline in the shares of the technology giant.


Reporting Reuters on Friday, the problem of stalled supply in Shanghai, China due to the Covid-19-induced lockdown, made it lack of steps to take new options. Apple’s Chief Executive Officer (CEO) Tim Cook is optimistic that if China is re-opened by the local government, then the final assembly of Apple products will be resumed, although it has not been confirmed when the lockdown in the Bamboo Curtain country will end.


He hopes that this problem will not drag on and be temporary so that it can get better from time to time.


Regarding the impact of Russia’s invasion of Ukraine, Apple’s Chief Financial Officer (CFO) Luca Maestri once revealed that as a result of this problem a larger sales decline will occur in the fiscal third quarter. He told analysts that supply chain problems would cost sales in the quarter by $4 billion to $8 billion and he expects a substantially heavier hit than the second quarter.


Amid the pandemic conditions that are starting to improve, this does not seem to be good news for Apple because people have started doing activities in a hybrid manner so the funds allocated for purchasing devices tend to decrease. For example, Apple mentioned that iPad sales fell 2 percent to 7.65 billion US dollars due to supply chain constraints.


However, complementary accessories still have good demand from the market, for example, Apple’s loudspeakers recorded a 12 percent increase in sales to 8.8 billion US dollars.

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