OPINION: We're going to see slower growth and possibly some disappointments for many consumer tech companies. This shows which companies have the strength to power through major supply-chain problems, and why selling tech to businesses is always helpful.
The typically robust holiday season is going to be tough this year for many consumer-focused tech companies, but here’s what investors need to know before adding to their wish lists for Santa.
Don’t be too scared off of some of the big names, though, because they have the size to work through the supply-chain issues. In Apple’s case, the behemoth was still not willing to give a revenue forecast after component shortages lead to a $6 billion revenue shortfall in the September quarter, but did say component shortages will be an even bigger factor in its December quarter.
“We saw this coming early and we’ve been talking about it for the last couple quarters, and we have put in place plans both for dual sourcing for certain parts,” Qualcomm Chief Financial Officer Akash Palkhiwala told analysts. “Coming out of COVID, consumer behavior and supply chain inputs have been very challenging to predict in the short-term, as clearly evidenced by our new outlook,” Peleton co-founder and Chief Executive John Foley told analysts in the company’s earnings call last week. Jill Woodworth, its CFO was even more blunt, stating that it “underestimated the reopening impact on our company and the overall industry.
See also: Apple and Amazon are struggling, so investors may want to look to these tech stocks instead “Projected growth rates for the fourth quarter in tech, based on consensus estimates, are showing less growth,” said Daniel Morgan, a portfolio manager at Synovus Trust which owns most of the companies in this column in its funds. “However in software, we are still looking for an acceleration.”
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