Apple and Amazon both lose billions after US ‘supply constraints’ despite Brexit claims | Science | News
It comes after both the companies disappointed investors with their earnings reports last night. Shortages are said to have knocked Apple’s sales by $6billion in the latest three-month period and it said that the impact could get worse. Tim Cook, its chief executive, described “larger than expected supply constraints” in the latest quarter.
Although it unveiled a 47 percent rise in iPhone sales, it said a shortage of semiconductor chips was disrupting production of most of its products.
Amazon also appeared to follow suit with a forecast that holiday-quarter sales would be well below expectations.
It cited that supply shortages would make it difficult for retailers to keep their shelves stocked.
The company warned that fourth-quarter sales were likely to be between $130billion and $140billion, against expectations of $142.05billion.
Andy Jassy, the chief executive who took over from Jeff Bezos, the company’s founder, in July, said: “In the fourth quarter, we expect to incur several billion dollars of additional costs in our consumer business.
“It comes as we manage through labour supply shortages, increased wage costs, global supply chain issues and increased freight and shipping costs.
“It’ll be expensive for us in the short term.”
Amazon has said it will spend several billion dollars to manage labour shortages and supply chain issues in the run-up to Christmas.
The online retail giant said it was doing “whatever it takes to minimise the impact” on customers and sellers.
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It comes after a top EU commissioner has branded Brexit a “catastrophe”, pointing to shortages in supermarkets and on petrol station forecourts in Britain.
Thierry Breton, the EU’s internal market commissioner, told a broadcaster in his native France that Britain’s departure from the EU was causing “real drama”.
It comes amid acute supply chain problems in the UK, including a shortage of lorry drivers, soaring fuel costs and depleted petrol stations.
He added: “Look at what is happening on the supermarket shelves, look at what is happening at the petrol pumps, look at what is happening with the shortage of nurses and doctors, look at what is happening with the shortage of truck drivers, look at what is happening in the construction sector.”
But George Godber, fund manager at Polar Capital, told the BBC: “It shows that these global giants – and they are just vastly huge businesses – are not immune from the problems that every business is facing.”
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Businesses across the world have been grappling with shortages and issues with supply chains as economies have rebooted following coronavirus lockdowns.
A global chip shortage is causing delays on the production lines of many products – including cars, washing machines, and smartphones – because supply has not kept pace with demand.
Surging demand for goods, including those sold by Amazon, has led to increased congestion at ports in many countries, with retailers sounding the alarm bell that deliveries for the holiday season could be delayed.
In California in the US, there have been record-breaking queues of container ships outside major ports.
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