Apple cuts iPad production to allocate chips to iPhone 13

Apple

The iPad and iPhone models have a number of components in common, including both core and peripheral chips

Apple has cut back sharply on iPad production to allocate more components to the iPhone 13, multiple sources told Nikkei Asia, a sign the global chip supply crunch is hitting the company harder than earlier.

Production of the iPad was down 50% from Apple’s original plans for the past two months, sources briefed on the matter said, adding that parts intended for older iPhones were also being moved to the iPhone 13.

The iPad and iPhone models have a number of components in common, including both core and peripheral chips. This allows Apple to shift supplies between different devices in certain cases.

The company is prioritizing iPhone 13 output in part because it forecasts stronger demand for the smartphone than for the iPad as Western markets begin to emerge from the coronavirus pandemic, sources said. Europe and the Americas account for 66% of Apple’s revenue.

The peak of new iPhone sales also comes within months of release, so ensuring smooth production for the iPhone 13, which was released on Sept. 24, is a top priority for Apple right now.

Demand for the iPad, however, has also been robust thanks to the rise of remote working and learning amid the pandemic. Global shipments of iPads jumped 6.7% on the year to 53.2 million devices last year, securing a 32.5% global market share, far ahead of the No. 2 Samsung’s 19.1% share, according to IDC data. Total iPad shipments were 40.3 million for the first nine months of this year, up 17.83 % from the same time a year ago.

Global tablet shipments for 2020 came to 164.1 million units, up 13.6% from the year before.

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