Apple has notified several suppliers that it plans to produce approximately 213 million iPhones in the 12 months to March 2021, a year-on-year increase of 4%. Prior to this, some suppliers believed that orders from Apple may be significantly reduced this year.
Affected by the epidemic, since mid-March, Apple has closed most of its retail stores. Analysts said that although global demand for the iPhone may decline, the Cupertino-based company is expected to increase the inventory of its new 5G iPhones due to concerns about component shortages.
Last week, Apple released a new generation of low-end iPhone SE. Later this year, Apple is expected to release three to four 5G iPhone models. We know that the necessary parts for these 5G iPhones have already been shipped.
According to people familiar with the matter, including the iPhone SE and the upcoming 5G iPhone, the production of existing models and new models account for almost 50% each.
Also Read: Apple Plans To Assemble The 2020 iPhone SE In Brazil
According to an executive of a parts manufacturer: ‘Apple’s production outlook is pretty bullish, and we will need to assess whether it is based on a realistic demand [forecast]. Actual production could be 10% to 20% lower.’
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The closure of the retail stores makes it difficult for Apple to measure the market’s demand for its products. Currently, most of Apple’s sales are online. Therefore, Apple is preparing for the year-end shopping season by increasing the inventory of new models.
Affected by the epidemic, global smartphone demand may decline. To this end, some component manufacturers hope to carefully evaluate Apple’s output prospects. A display purchasing manager said: ‘Apple may want to adjust inventories so that they have sufficient stocks in the fall and on Christmas.’
Will The iPhones Production Capacity Change?
This year, Apple is expected to produce about 200 million iPhones. This is about 10% less than the nearly 220 million expected before the outbreak.
According to past practice, Apple will formally place orders with suppliers in May and June. In the past, Apple has also revised its expectations (meaning adjusting the number of orders). Analysts said that if the epidemic continues, Apple may also amend this year’s orders in the future.
In March this year, China’s smartphone shipments were 21.029 million units, a year-on-year decline of 21.9%. Among them, iPhone sales were 2.5 million units, an increase of 416% from February.
It should be pointed out that China’s large online retailers are selling iPhones at a discount because it is unclear whether Apple’s sales volume is expected to be established. As the new coronavirus is still spreading, iPhone sales in the US and Europe are also expected to slow.