Amazon and Apple Face Supply Shortages For the Holidays

Tech giants Amazon and Apple warned their customers that limited supply in resources and a shortage of employees would limit the amount of goods they can provide (or supply) this holiday season. However, to ensure their businesses remain credible and reliable in the eyes of the public, especially during such a difficult economic season, Amazon plans to spend an extra 4 billion dollars to hire workers and guarantee packages arrive on time. Apple will follow Amazon’s actions, but they’re taking more drastic measures, using chips and parts of newer iPads to meet the demand for their new iPhone (the 13). Despite the measures taken by both powerhouses, Amazon shares went down by more than 4 percent, while Apple shares were down nearly 3-5 percent, resulting in little to no profit for the week. Although Apple and Amazon are able to coordinate with manufacturing partners to increase yields and the amount of product they can produce, the economic difficulties which they’re facing are so brutal that the fourth quarter may not turn an operating profit. Even as consumers filled shopping carts during the pandemic, both firms struggled to cover productivity costs and reach their monetary goals. 

Due to the pandemic, there has been an extreme scarcity of resources. As a result, many companies are not able to supply a great amount of goods. We can see this in the Apple and Amazon example described previously, for both global powerhouses are even experiencing the effects of shortages. In turn, we can logically conclude that very small businesses are most likely in a similar situation, for they don’t have nearly as much influence and financial ability when compared to colossal corporations. The amount of specialized products which businesses can supply is gradually decreasing, and therefore the prices are increasing overall; recently, the price of an iPhone went from around 800 dollars starting to approximately 1000 dollars (999 dollars to be exact). If this pattern continues, and we don’t find a solution soon, then scarcity of specific goods can only increase, resulting in greater inflation and higher rates of unemployment. This is more relevant now than ever since the cost of living is going up. People can no longer afford to pay more for groceries or simple necessities because a majority of their income is going towards housing and family.