Apple and Amazon on Thursday revealed disappointing results for their most recent quarters, as problems in the global supply chain began to be felt.
Tim Cook, the CEO of Apple, said that his company's lower-than-expected performance was due to a shortage of chips.
Customers seeking to buy new iPhones, iPads, Apple Watches and Mac models have found that the products will not be delivered until late November or even December - a situation that Cook earlier this month warned could be coming.
This quarter marks the first time since April 2016 that Apple has failed to beat earnings estimates, and the first time since May 2017 that Apple's revenues have missed estimates, according to Refinitiv data.
'We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion,' Cook told CNBC.
Tim Cook, the CEO of Apple - pictured on October 18 - has said that 'the chip shortage lingers on' amid issues in the global supply chain
'The supply constraints were driven by the industry wide chip shortages that have been talked about a lot, and COVID-related manufacturing disruptions in Southeast Asia.'
He said the situation had improved, but 'the chip shortages linger on,' and could run in to 2022.
Apple's iPhone 13 was released on September 24 - the day before the quarter closed - and so the results do not reflect its successful launch
Apple's overall revenue was still up 29 per cent, to $83.36 billion - versus an estimate of $84.85 - and each of its product categories grew on an annual basis.
Sales of iPhones made up the lion's share of revenue, with $38.87 billion recorded - an increase of 47 per cent, year on year. Apple missed its target of $41.51 billion, however.
The data also fails to take into account most of the sales of the new iPhone, the 13 - the phone was available for pre-orders on September 17, and available from September 24. The quarter ended on September 25.
Cook said the company expects 'solid year-over-year revenue growth' in the December quarter - despite him admitting Apple will face worse supply constraints in the current quarter.
The strongest growth in Apple product categories aside from iPhones was in its services business, which includes sales from the App Store, music and video subscription services, advertising, extended warranties, and licensing.
Apple's services grew 26 per cent annually, which Cook said was higher than the company expected.
The tech behemoth's shares fell 4 per cent at one point on Thursday as the news of their missed targets was released.
Amazon also saw its share price fall by 4 per cent on Thursday as they too announced worse than expected results.
Revenue in the third quarter rose 15 per cent, down from 37 per cent growth in the same period a year ago.
The disappointing result was due to people returning to shops, post-pandemic, and relying less on Amazon for their purchases, said CEO Andy Jassy.
Jassy, 53, took over from Amazon's founder Jeff Bezos in July.
He warned investors that issues in the global supply chain and the lingering impact of the pandemic would also be felt in their next quarter.
Jassy said the company expects to take on 'several billion dollars' of extra costs in its consumer business in the fourth quarter as a result of labor shortages, higher employee costs, global supply chain constraints and increased freight and shipping costs.
Andy Jassy, who took over from Jeff Bezos as CEO of Amazon in July, has admitted that the company is struggling with supply chain issues and post-pandemic problems in staffing
Amazon is struggling with a shortage of staff as COVID problems linger
Amazon is navigating these challenges as it enters the peak holiday season, he said.
'It'll be expensive for us in the short term, but it's the right prioritization for our customers and partners,' Jassy said in a statement.
Amazon said its operating profit in the fourth quarter will be in the range of $3 billion - a sharp drop from its operating profit of $6.9 billion in the same period in 2020.
Sales in online stores rose 3 per cent from
