Apple falls after iPhone supply-chain disruption drives first revenue miss since 2018

Container ships at the backlogged Port of Los Angeles in October 2021.
Container ships at the congested Port of Los Angeles. Reuters/Alan Devall
  • Apple stock fell 4% on Friday after ongoing supply-chain disruptions led to the iPhone maker’s first revenue miss since 2018.
  • Semiconductor supply constraints ultimately lowered Apple’s revenue by about $US6 ($AU8) billion.
  • “It’s not a demand issue but a supply issue that continues to be the elephant in the room for Apple heading into holiday season,” Wedbush said.


Apple stock fell as much as 4% on Friday after its fourth-quarter earnings report revealed a revenue miss for the first time since 2018.

The miss was driven by supply-chain disruptions for semiconductors, which negatively impacted iPhone and other product revenues by about $US6 ($AU8) billion.

Comments from Apple CEO Tim Cook signaled that the supply-chain issues could continue into next year, saying it’s tough to predict when the chip shortage will end. But he still expects strong demand dynamics to help the company hit record revenues in the holiday quarter.

Here are the key earnings numbers:

Revenue: $US83.4 ($AU111) billion, versus analyst estimates of $US85.0 ($AU113) billion
iPhone revenue: $US38.9 ($AU52) billion, versus analyst estimates of $US41.6 ($AU55) billion
Earnings per share: $US1.24 ($AU2), in-line with analyst estimates

Despite the revenue miss, it was still a strong quarter of growth for Apple, with total revenues up 29% year-over-year as Mac and Services revenue had record quarters.

“It’s not a demand issue, but a supply issue that continues to be the elephant in the room for Apple heading into holiday season,” Wedbush analyst Dan Ives said, adding that supply constraints should be transitory and not hold back Apple’s climb to a $US3 ($AU4) trillion market value in 2022.

Much of Ive’s bullish view on Apple stock is derived from the iPhone 13 launch and an ongoing “supercycle” of hundreds of millions of iPhone users expected to upgrade to newer versions over the next 1-2 years.

But Apple runs the risk of consumers opting for different holiday gifts this season as much of their products have long lead times of upwards of a month. Expected delivery times for popular iPhone models are already 3-4 weeks out, according to its website.

Some on Wall Street think that could ultimately hurt Apple demand if consumers look elsewhere since the new iPhones may not arrive in time. “Consumers could easily be walking away from purchases owing to longer lead times,” Goldman Sachs said in a Friday note.

Despite Friday’s decline, Apple stock is still up more than 10% year-to-date.