Apple has admitted it does not know when it will restock its new foldable smartphone, the iPhone Duo, as the company approaches the critical holiday shopping season. The device, which launched in late October, sold out within a week despite its steep price tag of nearly $2,000. Chief Executive John Ternus stated that the company is facing significant hurdles in sourcing key components, making it difficult to balance supply with consumer demand.
iPhone Duo Launch and Supply Constraints
Ternus, who took over from Tim Cook in September, presented his first quarterly results as the head of the tech giant. He described the current market environment as having unprecedented price increases for memory chips. This surge in costs is largely driven by the artificial intelligence industry, which is investing billions into building data centers to support chatbots and other AI platforms. These data centers require vast amounts of memory storage, creating intense competition for semiconductor resources.
Apple executives warned that these supply constraints are expected to persist into next year. Sabih Khan, the company’s chief operating officer, noted that most Apple devices are still experiencing shortages. The issues are partly linked to difficulties in obtaining microprocessors with advanced nodes, which are primarily manufactured by TSMC in Taiwan. Khan emphasized that the company is working to get the iPhone Duo into customers’ hands as quickly as possible, though no specific timeline was provided.
Financial Results and Product Performance
Despite the supply issues, Apple reported strong financial figures for the three months leading up to September 26. Overall sales rose from $102 billion to $114 billion, while pre-tax profit increased from $32.8 billion to $36.1 billion. Sales of Mac computers reached a record $10.7 billion, marking a 27% growth. The company also noted that it sold more iPhones globally over the last year than ever before.
However, not all product lines performed equally. Sales of iPads fell by 10%, and wearable products, including headphones and watches, dropped by 7%. The iPhone Duo sales were not included in these figures because the device launched after the quarter ended. Ternus expressed satisfaction with the early reaction to the foldable phone, calling it the first major design change for the iPhone in nearly two decades.
Some buyers have reported issues with the iPhone Duo’s screen, with a small number of devices cracking along the inside fold. Apple recently announced it would replace affected handsets. Executives did not mention these technical problems during the financial report, focusing instead on the broader supply chain challenges. Analysts noted that Apple has raised prices on nearly all its hardware products by approximately 20% to offset rising component costs.
Market reaction to the news was mixed. Sunil Krishnan from Aviva Investors described the results as solid, highlighting Apple’s impressive profit margins. However, the company’s share price fell by 1.8% in after-hours trading, reflecting investor concerns over the guidance on profit margins and the ongoing memory chip shortage.
Source: BBC
