This year, the supply chain, also aware of the global pandemic and unemployment, threatens to undermine some of the holiday season.
Apple’s October 28 earnings report conveys the hard truth that the company is striving to acquire internal chips and special components for higher-end products.
With electronics supplies falling into Q4, it looks like the Grinch has his eye on Christmas at Apple this holiday season. But the sleigh bumpy ride for Apple this winter could mean cost-effective longevity for smart, long-term investors.
What happens with the supply chain?
This year has already seen damage from frequent supply chain conflicts arising from the COVID-19 pandemic, and further trouble due to the closure of the Suez Canal in March. Those cascading events put a real strain on companies that produce global materials, and which are manufactured in China or other regions where labor costs are lower.
Large semiconductor manufacturers rely on raw materials from distant shores, and in a call for more recent acquisitions, Apple tackles how the shortage is compounded by supply chain disruptions from just a quarter of the industry already. CEO Tim Cook bet heavily on Apple’s reliance on Foxconn and the ability of other manufacturers to acquire major applications from around the world. But transmission delays and troubleshooting COVID-19 keep Apple key manufacturers from delivering essential components, including boxes, cameras, and internal chips and special plastics.
How can that weigh on Apple’s stock prices in Q4?
Apple’s new product launches should have caused higher profits, but the company’s struggles to get applications to manufacturing, and finished products, cost somewhere around $ 6 billion , according to Cook during the asset call. “The demand is very strong,” the official said, but without proper supply, retailers could not save the expected sales figures. This led Apple to release prospective games and lower its Q4 expectations.
Stores are having a hard time keeping the new iPhone 13 and Apple Watch Series 7 in stock, and the Macbooks have backed up months after delivery. In all likelihood, the final quarter of 2021 will feature the same struggles. The next asset report at the end of January, one of the most affected by holiday sales, could even deliver reports of a missed review asset, something the company avoided at the end of October.
Is it time to buy a competitor?
Samsung, Apple’s main competitor in the smartphone market, is struggling to keep up with supply year after year. It has hit with supply chain problems earlier than Apple, leaving Samsung in a bad world to play on its rival Christmas troubles.
Samsung’s latest flagship device, primarily a DRAM server and NAND memory chips, continues to drive industry games, but its smartphone division has yet to manage to take advantage of the challenges facing Apple. The supply chain failure of raw materials and logistics capacity to carry the finished cargo is an ongoing case for Samsung going towards the end of the year.
Xaomi, OPPO, vivo, and other global competitors also face similar market conditions. Product distribution may not pass much between big buyers, but anyone who can effectively deliver products from raw materials to final delivery in the world to be a great winner this holiday season.
Look to Black Friday and Cyber Monday sales for an early indication of who can pick up the goods on the shelves at the beginning of the season. But the real proof in Christmas pudding will be the holiday numbers of December. The National Retail Federation is likely to provide a great bellwether for these events as time goes on.