Chip shortages could delay iPhones and Macs, Apple warns
What's the story
Apple has reported a record-breaking quarter, with revenue hitting nearly $110 billion for the June quarter, a 16% increase year-on-year. The company's net profit also grew by 26% to $29 billion, driven largely by strong demand for its iPhone and Mac products. However, Apple's shares fell over 7% in after-hours trading as executives warned of worsening supply constraints that could affect some of its most popular devices in the coming months.
CEO's statement
Tim Cook warns of worsening supply constraints
After the earnings announcement, outgoing CEO Tim Cook acknowledged that Apple is already facing shortages affecting Mac computers. He warned that this issue could spread further.
"We're seeing some very significant constraints currently with limited flexibility in the supply chain to remedy it," Cook said.
One of the biggest challenges lies in sourcing critical chip components needed for its product lineup, including Macs and iPhones.
Demand surge
Chip shortages attributed to surge in customer demand
Cook clarified that the chip shortages are not primarily due to production failures, but rather a surge in customer demand.
"This is not a regular supply issue, it's a demand forecast issue to be candid," he said. "We've got a quarter ahead where we'll be scrambling on the supply side."
Despite these challenges, Apple reported iPhone revenue growth of 22% during the quarter and Mac sales growth of 25%.
AI focus
Apple doubles down on AI strategy
Along with hardware, Apple also reiterated its long-term strategy around artificial intelligence (AI).
Cook said the company's redesigned Siri is still in public beta and called AI "an enormous opportunity for Apple going forward."
He emphasized that Apple's ability to perform many AI tasks on-device rather than relying heavily on cloud infrastructure would be a key competitive advantage.