Holiday season

IPhone 13 sales exceed 40 million during the holiday season – but there’s a catch

Even as Apple prepares for an eventful 2022 with a slew of new products, its iPhone 13 series is proving to be something of a cash cow. The company is said to have sold 40 million units of handsets during the holiday season and may as well continue to show strong sales over the next two quarters.

A new research report has highlighted the success of the iPhone 13 series in the market and also questioned Apple’s ability to maintain sales numbers, given its lingering supply chain issues. In fact, the report by Wedbush analyst Daniel Ives claimed the company was facing a 12 million unit supply shortage during the holiday quarter.

In other words, Apple continues to be stuck in the supply-side constraints that were reported earlier in the lead-up to festival season. Had there been no supply chain issues, the Cupertino-based tech giant would have added 25% more sales during the Thanksgiving, Christmas and New Years season.

In November, reports said Apple could struggle with this supply shortage for at least three to four months. A report from Digitimes suggested that despite increased production from suppliers, the situation may not ease until the end of February. Apple shipped more than 50 million iPhones in the third quarter of 2021.

Analyst predicts happy days for Apple

However, Daniel Ives is confident that Apple will significantly increase its service revenue. In the report published by Philip Elmer-DeWitt, the analyst says that the market alone seems to have valued Apple’s service activity at $ 1.5 trillion. He also predicted that Apple would become the first publicly traded company to be valued at $ 3 trillion, a threshold it briefly exceeded earlier this week.

For his part, Daniel Ives said that instead of focusing on public perception of Apple, the research looked to supply chain positions in recent weeks as the basis for this analysis. “… we believe demand outstrips supply for Apple by around 12 million units in the December quarter, which will now add to favorable winds for Cupertino in the March and June quarters as supply chain issues are easing at 1H22, “he said.

Apple’s growing connection to India could be a reason

Foxconn's unit in Sriperumbudur in Tamil Nadu

(Image credit: Foxconn)

We believe that much of the improved supply chain challenges could come from India. Apple’s subcontractor Foxconn has started trial production of the iPhone 13 in Sriperumbudur (near the port city of Chennai in southern India). It is expected to begin deliveries of Apple’s current flagship model by February 2022.

Just to let you know, the Foxconn factory already manufactures the iPhone 11 and iPhone 12 while the iPhone SE is deployed from the Wistron factory in Bengaluru. India’s third-largest assembler of apples, Pegatron, has yet to start production.

There is, however, a fly in the ointment (or is it worms in the porridge?) That Apple needs to get rid of. The Foxconn factory that was supposed to make the iPhone 13 had to be closed following protests over the quality of food supplied to a hostel where several workers are staying. The latest update is that the plant could reopen within the next two days after ensuring the required compliances.

Apple could also be encouraged by the Indian federal government’s proposal to bring the best chip makers into the country. He had previously surveyed major chipmaking companies such as TSMC, Intel, AMD, Fujitsu and United Microelectronics Corp to try to establish a manufacturing base in the country.

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