Apple has canceled its plans to increase production of the new iPhone because the previously expected surge in demand for the new handset has not occurred, sources familiar with the matter said on September 28. iPhone 14 series smartphones were released, and Apple had hoped that the new launch would trigger a spurt in sales, but so far it has failed to do so.
Apple has informed its suppliers that it is withdrawing its plan to assemble an additional 6 million iPhone 14 series smartphones in the second half of this year, according to anonymous sources familiar with the matter. Apple is aiming to assemble 90 million of the new phones in the second half of this year, roughly the same capacity as last year and in line with Apple’s initial expectations this summer, the people familiar with the matter said.
Consumer demand for the iPhone 14 Pro model is stronger than for the entry-level model, according to some people familiar with the matter. They also said that at least one Apple supplier is shifting new phone production capacity from the iPhone 14 entry-level version to the high-end model of the Pro version.
US stock futures were lower following the news, with contracts on the Nasdaq 100 index falling as much as 1.3 percent. Chipmaker TSMC fell 1.8 percent, Foxconn, the largest iPhone assembler, fell 2.4 percent, while Apple’s mobile phone component makers Dali Optoelectronics and LG Innotek both fell more than 7 percent.
Apple had raised sales expectations for the new products in the weeks leading up to the launch of the iPhone 14 series of smartphones, with some suppliers bracing for a 7 percent increase in orders.
An Apple spokesman declined to comment.
Consumer demand for personal electronics has also been affected by the global economic situation. According to market researcher IDC, the smartphone market is expected to shrink by 6.5 percent this year, with total sales of 1.27 billion units.
“The supply chain constraints that have negatively impacted the market since last year have eased and the industry as a whole is starting to shift towards restricted market demand,” said Nabila Popal, IDC’s research director. “High channel inventories coupled with low market demand and no immediate recovery in sight in the near term have sent mobile brand manufacturers into a panic, cutting orders significantly for 2022.”
