Apple Cuts iPad Production to Allocate Scarce Chips to New iPhone 13

Tech giant Apple (NASDAQ: AAPL) has decided to cut back its iPad manufacturing in order to use the much-needed semiconductor chips in its iPhone 13 production.

According to company insiders cited by Nikkei Asia, Apple has reduced its iPad production by 50% compared to the tech giant’s initial September-October plans. The parts that were earmarked for iPads were instead allocated towards the production lineup of Apple’s newest iPhone 13, as well as older models of iPhones.

The sources said that Apple is anticipating a more robust demand for its latest iPhone as opposed to the iPad, and as a result of ongoing global semiconductor shortages, the company has decided to prioritize the iPhone 13 in the pecking order of its products. However, demand for the iPad has also been on the rise as of recent, as a pandemic restrictions have forced consumers to work and study from home.

According to data compiled by market research company International Data Corporation (IDC), more than 40.3 million iPads have already been distributed in 2021, marking a 17.8% increase compared to last year. On the other hand, though, consumers must wait over four weeks to receive their new iPad, as per Apple’s website.

Previously, reports emerged that Apple will also likely cut back output of its iPhone 13 from a previous target of 90 million units to only 80 million units ahead of the holiday season, as the growing shortage of chips does not appear to be alleviating anytime soon.

Information for this briefing was found via Nikkei Asia and Apple. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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