Apple Pulls Back On Planned iPhone 14 Production Increase As Demand Fails To Materialize
Apple Inc (NASDAQ: AAPL) has reportedly told its suppliers not to proceed with efforts to increase production of the new iPhone models as the projected surge in demand failed to materialize, according to Bloomberg.
The California-based tech giant had upgraded its sales projections by 7% a few weeks before the release of the iPhone 14, and some of its suppliers had already started making preparations anticipating the boost in orders.
But as the anticipated growth in demand did not happen after the new lineup was launched early in September. Apple has told its suppliers to pull back efforts to increase assembly of the iPhone 14 product lineup by up to 6 million units in the second half of the year, according to the Bloomberg report which cites information from people familiar with the matter.
The company will target to produce 90 million handsets for the second half of the year, about the same level as the previous year, reflecting the original forecast they made in the summer. The people also said that at least one supplier is refocusing its production capacity from lower-price, entry-level iPhones to the more premium models as demand for the higher-priced iPhone 14 Pro models is proving to be stronger.
Apple is also adapting a big change in its manufacturing strategy. Beginning with the iPhone 14, it will be shifting some production away from China, and more towards India. While Apple has been assembling iPhones in India since 2017, it has never before produced the latest model in the country.
The shift is an effort to diversify production away from China and boost usage in India, where the market for the company is currently small.
The tech giant will move 5% of its global production for the iPhone 14 to India by the end of this year, according to JPMorgan analysts, adding that the company could make 25% of all iPhones in India by 2025.
Apple last traded at $146.64 on the Nasdaq.
Information for this briefing was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.