Apple has asked manufacturing partners to release at least as many iPhones as in 2021. Hoping to maintain demand from wealthy buyers and reduce competition – even against the backdrop of a global economic downturn.
The tech giant ordered a total production of 90 million iPhones from assemblers despite worsening forecasts for the smartphone market. In total, the Cupertino company expects to assemble approximately 220 million smartphones in 2022, about the same level as last year. It is assumed that Apple is confident in its abilities despite the fact that, according to IDC experts, the global smartphone market fell by 9% in June alone, and should decline by 3.5% in 2022.
While sales of Android devices continue to suffer. The high demand for the iPhone stems from the desire of many buyers to purchase premium devices. The actual disappearance of Huawei from the relevant market contributes a lot to the company’s success. At the same time, according to some reports, Apple intends to “slow down” the costs and hiring of new employees in some of its teams in 2023.
Apple may maintain strong iPhone sales in 2022 even as the market slows down
Bloomberg predicts iPhone sales growth will remain at “single digit” levels in the short to medium term. Accelerating inflation, developments in Europe, and sanitary restrictions related to the COVID-19 outbreaks in China have the potential to extend the product refresh cycle, impacting sales growth in fiscal 2022. However, Apple is actively preparing to introduce four new iPhone models that will perform better than the 2021 versions.
Until 2021, Apple maintained the iPhone sales target at 75 million from the launch until the end of the year. In 2021, it raised the bar to 90 million, counting on additional demand after the recession of the pandemic. The iPhone contract assembly companies posted record sales and profits last fiscal year.
It is expected that this year the iPhone will become the main driver of Apple sales. In the reporting period from April to June, iPhone and iPad performed better than expected. Although other products, including Mac and wearable devices, did not live up to expectations. And services performance one of the key growth drivers, barely managed to reach the planned level. According to analysts at Piper Sandler, “the current macroeconomic environment has not had a meaningful impact on the iPhone business”.