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Buyers of Apple’s new iPhone 13 face longer-than-expected delivery times due to the Covid wave in Vietnam and the US technology giant’s implementation of a new camera feature, Nikkei Asia has learned.
The disruption is mainly due to limited stock of camera modules for the four iPhone 13 models, as a significant number of its components were assembled in Vietnam, according to people familiar with the matter.
The supply chain sources expected that the rollout of new iPhones this year would be relatively smooth, as most changes to the updated devices are only incremental and Apple was able to store many important components.
But the company has expanded the use of its new sensor-shift optical image stabilization (OIS) to all four iPhone models when it was previously only available in the premium iPhone 12 Pro Max. This has put suppliers in a position to increase production without compromising production quality, against the background of severe constraints due to Covid.
Sensor Shift OIS stabilizes sensors on the camera to make images smoother and video more consistent, even when users are in motion, and is an improvement over previous technology that has stabilized camera lenses.
This article is from Nikkei Asia, a worldwide publication with a unique Asian perspective on politics, economics, business and international affairs. Our own correspondents and external commentators from around the world share their views on Asia, while our Asia300 division provides in-depth coverage of 300 of the largest and fastest growing listed companies from 11 economies outside Japan.
‘The installers can still make the new iPhones, but there’s a supply gap [in] that the stock of the camera modules is running out, ”one of the drivers with direct knowledge told Nikkei Asia. “We can do nothing but monitor the situation in Vietnam every day and wait until they increase the yield.”
The situation could improve as soon as mid-October, as production at one of the most important iPhone camera modules in South Vietnam has gradually resumed after several months of on-off disruption, another driver familiar with the situation told Nikkei said.
The current waiting time for an iPhone 13 Pro Sierra Blue with 512 gigabytes of storage is up to five weeks in China-Apple’s third largest market – while the waiting time for the same model is also five weeks in Japan and four weeks in the US, according to the company ‘s website. Even the waiting time for the iPhone 13 mini, with the smallest screen of the four new iPhones, is seven to ten days in China and the US and up to 15 days in Japan.
Apple declined to comment on this story.
Like other businesses, Apple has struggled year-round with unprecedented disk and component shortages that have hampered its revenue. It has derived some chips intended for its new iPads for use in the iPhone 13 series, which has also led to longer-than-expected delivery times for the new iPad and iPad mini, one of the people with immediate knowledge said. Apple has limited consumers in China to a maximum of two iPad purchases for the newly launched models, its website showed, a sign that this stock is also limited.
Meanwhile, many Apple suppliers are struggling to respond to a widespread production strike this week in several Chinese cities in Jiangsu, Zhejiang and Guangdong provinces – home to many technology manufacturers. The tighter control of energy consumption in Beijing has led to a halt in industrial power supply in the provinces.
So far, major iPhone collectors Foxconn, Pegatron and Luxshare have not been significantly affected by the power outages, Nikkei has learned. But the extent of a possible chain reaction due to production stoppages at the manufacturers of materials, components, modules and parts is still unknown. Suppliers are worried about another wave of unexpected power outages in October.
Vietnam, an emerging powerhouse in technology that has received a boost from the US-China trade conflict, has seen an increase in Covid cases since April. The southern part of the country, including Ho Chi Minh City and Binh Duong Province, where some technical suppliers are located, was hit hard by the Delta variant.
Suppliers from Apple, Netflix, Nike and Ikea had to suspend production in mid-July as the government imposed strict measures to curb the deadliest wave of the virus to date. Enterprises can only remain open if workers live on the premises, although this has since allowed more factories to reopen as workers are vaccinated, tested regularly and live in uninfected areas.
The US, European and South Korean chambers of commerce in Vietnam – which all represent foreign investors – expressed concern to the Vietnamese government in early September that too strict Covid closure measures could jeopardize the company’s willingness to invest in Southeast Asia. set. One survey shows that 20 percent of businesses have already relocated production abroad.
The Prime Minister of Vietnam, Pham Minh Chinh, said on September 23 that the government wants to bring the country back to something that looks normal by the end of the month.
“Due to the pandemic, there is indeed a limited supply of camera modules for the iPhone 13 series, but the impact on the shipping of the new iPhones must still be manageable,” Eddie Han, a senior analyst at Isaiah Research, told Nikkei Asia said. checking its supply chain.
Han said it would be worrying if the power supply restrictions in China continued to affect pressure lines, materials and petrochemical suppliers, as it was likely to affect component inventories for iPhones in the fourth quarter of the year.
A version of this article was first published by Nikkei Asia on September 29, 2021. © 2021 Nikkei Inc. All rights reserved.