Apple cuts iPad production to allocate chips for iPhone 13, newspaper says

Apple has scaled back iPad tablet production to allocate more components to the iPhone 13, a sign that the global chip supply crisis is hitting Apple harder than previously indicated, the Nikkei newspaper reported on Tuesday, citing various sources.

iPad production has halved from Apple’s original plans over the past two months, the newspaper said on its website, adding that parts destined for older iPhones were also being switched to the iPhone 13.

Apple weathered the supply crisis better than many other companies because of its huge purchasing power and long-term supply contracts with chip providers, snapping up market share from its rivals in the smartphone and tablet segment in the third quarter.

However, Apple boss Tim Cook warned that the impact of supply restrictions will be worse during the current sales quarter and that the chip shortage is now affecting most of the company’s products.

The iPhone maker is prioritizing its main production, the iPhone 13, in part because it anticipates stronger demand for the smartphone than the iPad as Western markets begin to emerge from the pandemic, the Nikkei said, citing unnamed sources.

In addition, a vacuum created by Huawei’s exit from the market shifted demand for companies like Apple in China, which helped the company’s sales in the last quarter. Apple posted an astonishing 83% annual sales growth in China during the quarter.