Setback for Apple on iPhone 14 | Mobile News

Setback for Apple on iPhone 14

Apple iPhone 14 generation may fall 16 million units shy of expectations this year, according to UBS.

By:BLOOMBERG
| Updated on: Dec 03 2022, 11:28 IST
iPhone 14 in photos: A quick glance at Apple’s fascinating new flagship
iPhone 14
1/5 The iPhone 14 features a 6.1-inch Super XDR OLED display with Ceramic Shield Protection. The iPhone 14 gets the same but smaller notch design and form factor as last year’s iPhone 13. (Apple)
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2/5 The iPhone 14 is powered by Apple’s A15 Bionic chipset which powered last year’s iPhone 13. Although Apple has claimed that this year’s A15 Bionic is an improved version of last year’s chipset. The A15 Bionic, although an year old, is still the fastest chipset in the market yet, making iPhone 14 still an amazing smartphone. It houses a 5 core GPU and a 6 core CPU. (Apple)
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3/5 Phone 14 gets the same 12MP main camera with a larger sensor with f/1.5 aperture lens and sensor shift stability. Apple claims an improvement of 49 percent in low light photography. and the 12MP ultra-wide camera. The front camera also uses the 12MP sensor with f/1.9 aperture. (Apple)
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4/5 iPhone 14 also has a new gyroscope sensor that can detect impacts of up to 256G. Apple also brings support for satellite connectivity on the iPhone 14, called Emergency SOS via satellite. Users can now use the Find My app to share their location with contacts. The service will be available from November 2022 and will be free for use for two years. (Apple)
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5/5 The price of the iPhone 14 starts at $799 for the 128GB variant. There is a 256GB variant which is priced at $899. If you want to go even bigger, the iPhone 14 also has a 512GB variant which is priced at $999. It is available in 5 colours - Midnight, Starlight, Blue, Purple, and Product Red. (Apple)
iPhone 14
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UBS analysts slashed their forecast of total iPhone 14 production to 76 million from 92 million units for the second half of 2022, a 20% fall from 2021. (Amritanshu / HT Tech)

Apple iPhone 14 generation may fall 16 million units shy of expectations this year, as China's Covid Zero policy roils its key Zhengzhou plant and entry-level models face weak demand, according to UBS.

UBS analysts slashed their forecast of total iPhone 14 production to 76 million from 92 million units for the second half of 2022, a 20% fall from 2021. They attributed the lower expectations to both the manufacturing disruption faced by Foxconn, also known as Hon Hai Precision Industry Co., and softening demand for lower-end iPhone 14 models. It's one of the most bearish estimates about the current quarter and comes at a time of uncertainty about China's potential relaxation of virus lockdown measures.

“It is important to monitor whether lengthening wait times for the iPhone 14 Pro/Pro Max affect demand,” UBS analysts led by Grace Chen wrote in a Dec. 1 note. “The speed with which Apple and Hon Hai can resolve the challenges at Zhengzhou is key to 2022's fourth quarter and 2023's first quarter volume.”

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Foxconn is maintaining closed-loop operation at its Zhengzhou campus, complicating efforts to make up for lost assembly time. The closed-loop approach restricts workers to their dorms or the factory floor, minimizing the number of other people they come into contact with in hopes of containing the spread of the virus.

Local authorities lifted the lockdown that had affected the area, and the central government has also indicated a softening stance. The pace of China's reopening is a closely watched measure and likely to impact the speed with which Foxconn can recruit staff to replenish its workforce and fulfill orders.

Challenges to iPhone Pro production could further pressure Apple's business, as the premium phones have picked up the slack for slumping demand for the regular iPhone 14 models this year. The Foxconn facility at Zhengzhou produces the vast majority of iPhone 14 Pro and Pro Max devices.

Turmoil at the Zhengzhou plant will likely lead to a production shortfall of 6 million iPhone Pro units, Bloomberg reported earlier this week. Apple has lowered its production target of the new handsets this year to about 87 million units from an earlier projection of 90 million units.

It's likely Apple could also ask assemblers like Pegatron Corp. and Luxshare Precision Industry Co., which typically focus on lower-end iPhone models, to produce more of the premium models to meet holiday season demand, UBS said. If such a shift happens, Foxconn's iPhone assembly share could fall from 70%-to-75% this year to 65%-to-70% in 2023, the analysts added.

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First Published Date: 03 Dec, 10:59 IST
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