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Apple Ditches Increase in iPhone Production After Demand Falters

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Apple Ditches Increase in iPhone Production After Demand Falters
Apple Ditches Increase in iPhone Production After Demand Falters

Apple is backtracking on its plans to ramp up production of its new iPhones this year. An anticipated spike in demand failed to materialize, according to people familiar with the matter.

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Apple had updated its sales projections in the weeks leading up to the launch of the iPhone 14. Some of its suppliers had begun preparing for a 7 percent increase in orders.

An Apple spokesman declined to comment.

China, the world’s largest smartphone market, is in an economic recession. China has hit its domestic mobile device makers and also hurt iPhone sales. Purchases of the iPhone 14 series during its first three days of availability in China were 11 percent lower than those of its predecessor the previous year, according to a note from Jefferies on Monday.

Global demand for personal electronics suppresses by rising inflation, recession fears, and the disruption of the war in Ukraine. The smartphone market expects to contract 6.5 percent this year to 1.27 billion units, according to data from market tracker IDC.

“The supply constraints that have been reduced in the market since last year have been eased. The industry has shifted to a market with limited demand,” said research director Nabila Popal of IDC. “High inventory in the channels and low demand with no signs of immediate recovery have caused OEMs (OEMs). It raises panic and drastically reduces their orders by 2022.”

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