The much-anticipated demand for the new model of the Apple iPhone failed to take off. According to some people familiar with the current scenario, Apple Inc. has dropped plans to increase production of the iPhone 14 due to lackluster response.
Apple Inc., based out of Cupertino, California, told its suppliers to slow down the increase of the iPhone 14 product range by as much as 6 million units in the second half of 2022. The information is from people who requested confidentiality as the plan is not yet been made public.
According to some sources, the demand for the high-end expensive iPhone 14 Pro versions is more than the entry-level models. Apple supplier is shifting to higher production capacity in the premium model segment from the lower priced entry-level models.
Even though the market slows down, Apple Inc. foresees sustained sales of its iPhone models in 2022. It had upgraded its sales estimates in weeks of releasing the iPhone 14, with some of its suppliers raising their capacity in anticipation of a 7% boost in orders.
Iphone Sales Critical
The success of the marquee product of Apple is crucial as it has wider ramifications for the tech industry, including suppliers such as Hon Hai Precision Industry Co. and Taiwan Semiconductor Manufacturing Co., whose profitability depends on the sales of iPhones and other related devices.
A spokesman from the iPhone maker declined to comment on the iPhone 14 sales performance.
The biggest smartphone market, China, is in the grip of an economic slump. Sales of iPhones, as well as domestic mobile makers’ sales, were affected. According to not on Monday by Jefferies Group LLC, a financial services company headquartered in New York, the purchase was down 11 % in the first three days of iPhone 14 availability in China compared to its predecessor released in the previous year.
The demand for personal electronic goods has remained subdued globally because of the war in Ukraine, recession fears, and rising inflation. According to data from IDC, a market tracker for mobile and consumer devices, this year, the smartphone market is expected to decline 6.5% to 1.27 billion units.
Research director at IDC, Nabila Popal, said the industry has shifted to a demand-constrained market from the early supply chain constraints that have eased. The OEMs are panicking as low demand and high inventory levels at distribution channels are forcing them to cut orders for 2022.
