Apple is asking suppliers to produce about 85 million units of the iPhone 15 this year, roughly in line with the previous year, people familiar with the matter said.
The Cupertino, California-based company is aiming to keep exports steady despite the turmoil in the global economy and a predictable decline in the overall smartphone market. This is likely to increase revenue overall as Apple considers raising the price of Pro models, the people said, asking not to be named because the targets are not public.
As the world’s most valuable company, Apple’s fortunes reverberate through the global economy, driving business for thousands of suppliers and employing millions of people from the US and China to Vietnam and India. Its shares have risen nearly 50 percent this year, taking its market capitalization to $3 trillion (roughly Rs. 2,45,45,295 crore).
Apple and its rivals are grappling with a sharp drop in demand for electronics from smartphones to computers as corporations and consumers put off purchases amid rising prices and economic uncertainty. In the US, the Federal Reserve is expected to raise interest rates again this week to fight inflation, while the world’s second-largest economy posted losses in the second quarter.
Apple’s production schedule is closely scrutinized because of its company-wide influence. From Samsung Electronics to Taiwan Semiconductor Manufacturing Co. to Foxconn Technology Group, some of the world’s largest corporations rely on the iPhone business to drive growth and margins. Apple said it will stop disclosing specific shipment numbers in 2018 to shift investors’ focus to more predictable businesses like the App Store.
This year, the company had to cut its forecast for upcoming entry-level phones by about 2 million because of a production challenge with CMOS image sensors, but offset the decline by adding orders for higher-priced Pro models, the people said.
There has also been a minor disruption to the new iPhone screens, but one of the people said the issue will be resolved in a week or two and will not have a significant impact on overall production. Previously reported information about screen issues.
An Apple representative did not respond to an email request for comment. DigiTimes previously reported that the initial volume of the new iPhones would be between 83 million and 85 million.
The company’s forecast for this year is 85 million, slightly lower than the 90 million shipment target Apple has promised for the past two years. But the U.S. company fell short of those targets in 2021 as chip shortages and then in 2022 slowed production due to prolonged Covid-19 restrictions in China.
Apple’s relatively stable fortunes contrast with the struggles of many competing smartphone companies that make devices using the Android operating system.
According to Counterpoint Research, phone sales have declined for eight consecutive quarters, including an 8 percent decline in the June quarter. Chinese Android brands Vivo and Xiaomi suffered declines of more than 10 percent.
Counterpoint estimates that Apple’s sales fell 2 percent in the most recent quarter, but its market share rose to 17 percent as demand for phones that sell for $600 (roughly Rs. 49,000) or more continued to grow.
“Apple is riding this “premiumization” wave, reaching record shares in multiple new markets that aren’t typically considered its core markets,” Counterpoint analysts wrote in the report. “A prime example is India, where it is projected to grow by 50 percent in Q2 2023.”
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