Nikkei Asian reports that Apple stopped production of iPhones for several days because it was in a period where the tech giant normally ramps up to fulfill holiday demand.
According to the report, chip shortages and supply chain problems caused the shutdown.
Nikkei was told by sources that production ceased in October as most Chinese companies close down for the Golden Week. This marks the end to dynastic rule, the march to democracy and allows people to travel throughout the country to celebrate the celebrations.
However, Apple uses this time to ramp up production to 24 hours a day and provides employees with overtime – but this year was the first time the tech giant closed in a decade.
Apple is 15 million units short of producing 230 million iPhones by 2021 due to production problems and shortages.
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The report says that the reason for the shut down was chip shortages, China’s power restrictions, and China’s supply chain limitations. According to sources, production was stopped at the end of October as most Chinese companies closed for Golden Week.
Nikkei Asia was told by a Nikkei Asia supply chain manager that because of the limited chips and components, overtime wasn’t logical and extra wages weren’t necessary for workers at front lines.
“That’s something that hasn’t happened before.” It was always when the assembly crews got ready for production that the Chinese golden holidays were the most hectic.
Production was increasing in November but not enough to meet Apple’s target of 230 million smartphones.
Apple’s iPhone 13 production plan called for 50 percent less volume, while the production of older iPhones was cut 25 percent.
Apple’s production will be halted and there are shortages, which means Apple won’t make 230,000,000 iPhones by 2021.
An executive from a major Apple supplier said to Nikkei that even if all the parts are available, the assembly will not be possible if there is a missing component.
Apple released a separate report last week claiming that it cut production of the iPhone 13 due to lack of customer demand.
This slump is caused by customers refusing to stand in long lines for their device. It also stems from supply chain limitations and shortages.
Other people are waiting to see the iPhone 14 It will launch in the fall 2022 and likely will have much more drastic updates than its predecessor, the iPhone 13.
The rising inflation rate, which is currently at 6.2 per cent, has disturbed many Americans. Many have chosen to save instead of splurging on luxury items.
Apple has reportedly reduced their goal of 10,000,000 units for 2011 due to a shortage in chips worldwide.
Due to the global supply chain crisis, they had planned to increase production next year.
Vendors have been informed by the company that orders are unlikely.
Bloomberg News reports that sales of the holiday season are forecast to increase by six percent, to $117.9 million in Apple’s fourth quarter.
Apple’s iPhone 13 and AirPods versions, starting at $699 each, were the most popular products.
Apple’s iPhone is considered Apple’s most valuable product. It was responsible for half their revenue of $365.8 million last year.
Apple even offered discount programs and inexpensive upgrades in order to boost demand for iPhone 13 but this does not appear to be enough to get consumers to purchase the latest smartphone.