Apple shares slide as Tim Cook warns of holiday supply constraints

Iphone 13 Summary Hero
Iphone 13 Summary Hero (Image credit: Joseph Keller / iMore)

What you need to know

  • Apple announced its Q4 earnings on Thursday.
  • Despite record revenue, Apple missed out on $6 billion because of supply constraints.
  • Apple shares are down in pre-market as Tim Cook warned of continued constraints in the holiday season.

Apple shares are down over 3% in pre-market trading, as Tim Cook warned of continued supply constraints across its product range going into the holiday season.

Apple announced record September quarter revenues of $83.4 billion, but estimated that supply constraints cost the company around $6 billion, from Tim Cook:

Sure. If you look at Q4 for a moment, we had about $6 billion in supply constraints, and it affected the iPhone, the iPad and the Mac. We had -- there were two causes of them for Q4. One was the chip shortages that you've heard a lot about from many different companies through the industry. And the second was COVID-related manufacturing disruptions in Southeast Asia. The second of those, the COVID disruptions, have improved materially across October to where we currently are.

As Cook noted, the COVID factor has improved significantly in October, but said that looking forward "we think that the primary cause of supply-chain-related shortages will be the chip shortage." Cook went on to say this would affect "pretty much most of our product" including its best iPhones, Macs, iPads, and more. Cook did however note that the chip shortage was happening on legacy nodes for older devices like the iPhone 12, as opposed to devices like iPhone 13. Constraints are expected to continue, however, as noted by CFO Luca Maestri:

As we mentioned earlier, during the September quarter, supply constraints impacted our revenue by around $6 billion. We estimate the impact from supply constraints will be larger during the December quarter. Despite this challenge, we are seeing high demands for our products and expect to achieve very solid year-over-year revenue growth and to set a new revenue record during the December quarter.

Cook said Apple estimated that constraints in Q1 would be larger than $6 billion, but that this is in part because the holiday quarter is usually Apple's strongest and it gets much more supply overall than it does in Q4.

With demand for new products hotting up and more supply issues on the horizon, the best Apple Black Friday deals are already a great place to find some early discounts and get ahead of the rush this holiday season.

Stephen Warwick
News Editor

Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.

Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9