Poor demand for iPhone 14 series: Apple cuts down on plans to increase production

Published On: September 28, 2022

Highlights

Apple has cut down production increase plans after low demand for iPhone 14.
The Cupertino giant has told suppliers to cut down the assembly of the iPhone 14 family by as many as 6 million units in the second half of the year.
The demand for the iPhone 14 Pro models is stronger than for the entry-level versions.

Apple introduced the iPhone 14 series earlier this month and they are already on sale across the globe. The iPhone 14 Pro and iPhone 14 Pro Max are significant upgrades over their predecessors, thanks to the large 48MP camera, new Dynamic Island layout on the front, and A16 SoC. However, it looks like the demand for the latest iPhones might not be what Apple would have anticipated. According to a report from Bloomberg, the company is backing off plans to increase production of its new iPhones this year after an anticipated surge in demand that failed to materialise.

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According to people familiar with the matter, the Cupertino giant has told suppliers to cut down the assembly of the iPhone 14 family by as many as 6 million units in the second half of the year. Apple will only aim to produce 90 million units for the period, which is roughly the same as last year and in line with the brand’s original forecast this summer.

Poor demand for iPhone 14

Apple has reportedly asked suppliers to cut down the assembly of the iPhone 14 family by as many as 6 million units in the second half of the year owing to less demand. However, demand for higher-priced iPhone 14 Pro models is stronger than for the entry-level versions, according to the sources. One of the Apple suppliers is said to be shifting production capacity from lower-priced iPhones to premium models.

Apple had upgraded the sales projections in the weeks leading up to the iPhone 14 release and a few of the suppliers started making preparations for a 7 percent boost in orders. China, the world’s biggest smartphone market, is facing an economic crisis that also affected the iPhone’s sales and domestic mobile device makers. The iPhone 14 series purchases in China over the first three days of availability were 11 percent down compared to the predecessor in 2021, according to a Jefferies note on Monday.

This isn’t an isolated Apple-only issue as global demand for personal electronics has also been suppressed by surging inflation recession fears and other factors. The smartphone market is expected to shrink by 6.5 percent this year to 1.27 billion units, according to data from market tracker IDC.

“The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market. High inventory in channels and low demand with no signs of immediate recovery has OEMs panicking and cutting their orders drastically for 2022,” said Nabila Popal, research director at IDC.