Apple Trims iPhone 14 Output by 3 Million Units as Demand Cools

    Apple Inc. expects to produce at least 3 million fewer iPhone 14 handsets than originally anticipated this year, according to people familiar with its plans.
    By: BLOOMBERG
    | Updated on: Nov 08 2022, 22:34 IST
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    iPhone 15
    1/5 Are you waiting eagerly to get some exciting insights into the Apple iPhone 15 specs? Though there is still a year's time for the new iPhones' launch (expected in September, 2023), the leaks and rumors about it are creating a buzz amongst the fans. And as per the latest update, it is being said that the volume button and the power button of the two high end iPhone 15 models, iPhone 15 Pro and iPhone 15 Pro Max, may adopt a solid state button design similar to the home button design of iPhone 7, iPhone 8, iPhone SE 2 and iPhone SE 3. (REUTERS)
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    2/5 The information has been provided by Ming-Chi Kuo, analyst at TF International Securities over his Twitter handle. "My latest survey indicates that the volume button and power button of two high-end iPhone 15/2H23 new iPhone models may adopt a solid-state button design (similar to the home button design of iPhone 7/8/SE2 & 3) to replace the physical/mechanical button design," he tweeted. (HT Tech)
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    4/5 Also, it is expected that high-end Android smartphones will also follow Apple's design to create new selling points, which is a structural positive for the mobile phone vibrator industry, the analyst added. (AFP)
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    Apple’s bigger problem in the coming weeks may be the slump in iPhone demand rather than supply. (REUTERS)

    Apple Inc. expects to produce at least 3 million fewer iPhone 14 handsets than originally anticipated this year, according to people familiar with its plans.

    The company and its suppliers now aim to make 87 million devices or fewer, compared with a target of 90 million units earlier, the people said, asking not to be named discussing private information. The reduction is primarily due to softer demand for the iPhone 14 and 14 Plus models, cheaper alternatives to the high-end Pro offerings.

    That comes in addition to supply problems in places like Zhengzhou, which is home to the main iPhone assembly site and is under a weeklong Covid-19 lockdown. Apple's shares slid 1.5% to $136.3 as trading got underway in New York.

    Sales of the iPhone 14 and Plus have rapidly cooled since their launch and the slowdown is deepening in China, according to a Jefferies analysis of the world's biggest smartphone market. Apple previously cancelled plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize, Bloomberg News has reported.

    Still, Apple said on Sunday that demand for its iPhone 14 Pro and Pro Max devices remains strong, though production of those handsets will be clipped by the lockdown in Zhengzhou. It declined to provide specific figures.

    SMBC Nikko analysts led by Ryosuke Katsura on Friday lowered their overall forecast for Apple's 2022 output to 85 million new iPhones from 91 million units. Their revised forecast actually raises expected production of iPhone Pro models, but cuts the standard editions by a bigger margin.

    “Some firms have begun to factor in the potential impact of these changes in their earnings outlooks,” Katsura and colleagues wrote. They revised their outlook after “confirmation this week of production and sales corrections in China and emerging signs of production cutbacks at some materials makers.”

    Apple declined to comment beyond a statement earlier about supply from Zhengzhou.

    The Zhengzhou facility, operated by Foxconn Technology Group and also known as iPhone City, is Apple's main production hub for assembling Pro editions of its iPhones. It's been the site of worker dissatisfaction and an exodus over the way Foxconn managed a coronavirus outbreak at the plant. The Taiwanese assembler has raised wages and put additional measures in place to improve worker welfare, which Apple has said is its top priority.

    The Chinese government's lockdown of Zhengzhou, effective for a week until Nov. 9, followed and now Foxconn says it's working closely with the government to stamp out the pandemic and minimize the disruption.

    Hon Hai Precision Industry Co., Foxconn's main listed unit, has traded relatively flat over the past week while Apple's shares are on a five-day losing streak amid wider skepticism about the prospects for tech and consumer businesses.

    Apple's bigger problem in the coming weeks may be the slump in iPhone demand rather than supply. China's rigid Covid Zero policy has led to sudden lockdowns across the country, stymieing economic activity. Daily Covid-19 cases just hit a six-month high, leading officials to declare that the nation will stick to its strict virus controls.

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    First Published Date: 08 Nov, 22:34 IST
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