Apple Inc is backing off plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialize, people familiar with the matter said.
The Cupertino, California-based company has told suppliers to pull back from efforts to increase assembly of the iPhone 14 product family by as many as 6 million units in the second half of this year, said the people, asking not to be named as the plans are not public.
Instead, the company would aim to produce 90 million handsets for the period, about the same level as in the second half of last year and in line with Apple’s original forecast this summer, the people said.
Photo: AFP
Demand for higher-priced iPhone 14 Pro models is stronger than for the entry-level versions, some of the people said.
In at least one case, an Apple supplier is shifting production capacity from lower-priced iPhones to premium models, they added.
Apple shares fell as much as 3.3 percent in premarket trading yesterday.
US stock index futures also turned lower after the news, with contracts on the NASDAQ 100 down as much as 1.5 percent.
In Taipei, key chip supplier Taiwan Semiconductor Manufacturing Co (台積電) fell 2.2 percent and Apple’s biggest iPhone assembler, Hon Hai Precision Industry Co (鴻海精密), was down 2.9 percent, amid a wide selloff of electronics suppliers.
ASML Holding NV, maker of advanced chipmaking gear, dropped as much as 3.2 percent in Amsterdam.
Apple had upgraded its sales projections in the weeks leading up to the iPhone 14 release, and some of its suppliers had started making preparations for a 7 percent boost in orders.
An Apple spokesperson declined to comment.
China, the world’s biggest smartphone market, is in an economic slump that has hit its domestic mobile device makers and also affected iPhone sales.
Purchases of the iPhone 14 series over its first three days of availability in China were 11 percent down on its predecessor, launched last year, a Jefferies note said on Monday.
Global demand for personal electronics has also been suppressed by surging inflation, recession fears and disruption from Russia’s war in Ukraine.
The global smartphone market is projected to shrink 6.5 percent this year to 1.27 billion units, data from market tracker International Data Corp (IDC) showed.
“The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market,” IDC research director Nabila Popal said.
“High inventory in channels and low demand with no signs of immediate recovery has OEMs [original equipment manufacturers] panicking and cutting their orders drastically for 2022,” Popal added.
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS