Apple Inc is backing off plans to increase production of its new iPhones this year after an anticipated surge in demand failed to materialise, according to people familiar with the matter.
The Cupertino, California-based electronics maker 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 will aim to produce 90mn handsets for the period, roughly the same level as the prior year and in line with Apple’s original forecast this summer, the people said.
Demand for higher-priced iPhone 14 Pro models is stronger than for the entry-level versions, according to some of the people. In at least one case, an Apple supplier is shifting production capacity from lower-priced iPhones to premium models, they added.
Apple shares fell 3.9% in New York Wednesday morning to $145.90. The shares are down 18% this year, compared with a 23% drop in the S&P 500 Index.
Analysts at Morgan Stanley and Oddo said the news didn’t imply any downside to their volumes forecasts. Bloomberg Intelligence analyst Anurag Rana said he “was not surprised” by the report and continues to “believe that weak demand from Europe and China could hurt overall iPhone sales in fiscal 2023.”
In Taipei, key chipmaker Taiwan Semiconductor Manufacturing Co fell 2.2% and Apple’s biggest iPhone assembler Hon Hai Precision Industry Co was down 2.9%, amid a wide selloff of electronics suppliers. ASML Holding NV, maker of advanced chipmaking gear, dropped as much as 3.2% in Amsterdam.
Britain’s Prime Minister Liz Truss walks outside Downing Street in London on September 23. A day after the Bank of England resumed its bond-buying in an emergency move to protect pension funds from partial collapse, Truss blamed the upheaval on Russia’s invasion of Ukraine that has caused inflation to spike around the world.