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Apple Power-Chip Shortage Could Hinder Holiday iPhone 12 Sales

Apple reportedly is struggling to obtain chips that control how power is consumed on its new iPhone 12, raising the specter of a shortage ahead of the holidays.

Apple  (AAPL) - Get Apple Inc. Report reportedly is struggling to obtain chips that control how power is consumed on its new roster of iPhone 12s, raising the specter of a potential shortage of the in-demand 5G-enabled devices ahead of the crucial holiday shopping season.

Citing people familiar with the situation, Bloomberg reported Apple was grappling with a shortage of the chips that manage power consumption in its iPhones and other devices - a key component given the devices’ 5G capabilities and other power-hungry features like its new cameras.

Increasing demand for silicon across a range of products as well as supply-chain disruptions resulting from Covid-19 are the main causes behind the shortage, according to Bloomberg. 

Stockpiling of components in the wake of this year’s virus-led lockdowns was further exacerbating supply chain issues, not just for Apple but for other smartphone makers including Huawei, which also stocked up ahead of a September sanctions deadline though Huawei reportedly has been looking at building its own chip plant.

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Despite the shortfall, Apple suppliers like Taiwan Semiconductor Manufacturing are likely to prioritize Apple's backorder and its power-hungry iPhone 12 over other customers lining up for  parts, according to Bloomberg. 

Apple recently launched four 5G models, and analysts expect strong consumer demand for the devices. During a recent conference call with analysts, Apple CEO Tim Cook warned about supply constraints for the iPhone 12, Mac, iPad and some Apple Watch models, though he didn’t specifically mention power-management chips.

Before the phone's formal launch, Apple was preparing its producers to make as many as 75 million 5G iPhone 12s. The company has said it expects shipments of its various iPhone 12 models to reach as high as 80 million units in 2020. 

In the U.S., a check of Apple’s website showed that new iPhone 12 Pro orders won’t arrive to customers until the end of November or early December, while the regular iPhone 12 wasn't showing any delay. 

Meantime, Apple on Monday announced a ‘One More Thing’ event slated for Nov. 10 that is widely believed to be for the launch of the newest range of Apple computers featuring its own ARM-based Apple Silicon microprocessors.

Shares of Apple were up 3.14% at $118.46 in trading on Thursday.