According to a new supply chain report, Apple intends to produce the same number of iPhones in 2022 as it did in 2021: roughly 20 million fewer than analysts expected. According to AppleInsider, despite the iPhone being the only smartphone to see a sales increase in the first quarter of this year, Cupertino will not be taking any more iPhone orders.
According to Bloomberg, Cupertino appears to have decided to take a more conservative stance this year, adding that the smartphone market may face some challenges. According to sources, the tech giant has asked suppliers to assemble approximately 220 million iPhones, which is roughly the same as last year.
Given that a major update to the iPhone is expected in the fall, that’s about 20 million units short of market forecasts, which were focusing on a number closer to 240 million units. However, as previously stated, the mobile technology industry appears to be facing some difficulties. This essentially means that production estimates have been reduced not only for Apple, but also for all other players in the mobile market.
The problems that will plague the beginning of 2022 should not be underestimated. According to Bloomberg, the war in Ukraine, the worst inflation in decades, and supply-chain issues are all factors that could contribute to lower mobile tech sales in 2022.
That appears to be supported by statistical predictions. Strategy Analytics predicts that overall smartphone shipments will fall by around 2% in 2022, and TrendForce has already reduced its full-year production forecast twice in recent weeks.
As some of you may be aware, Apple stopped disclosing its production targets in 2019 and does not publish how many iPhones it sells.
However, Cupertino has warned that the recent pandemic-related lockdowns in China will have an impact. According to Apple, the situation could reduce sales by $4 billion to $8 billion in the current quarter.
On top of that, the entire tech industry anticipates a slowdown in consumer spending as many everyday necessities become more expensive due to rising fuel and material prices.
Shipments fell 11% in the first quarter across the entire mobile tech market, marking the worst quarter since 2020. Even Xiaomi, a company known for its rapid growth, reported its first-ever quarterly revenue decline earlier this month.
But is Apple truly threatened by all of this? Probably not, given that Apple is facing even less competition (you know, Huawei used to be very aggressive, and was number one in sales, but has now been shut out of markets), and demand for Apple products is usually high due to the wealthier customer base and software and services ecosystem.
Furthermore, Apple is preparing an enticing iPhone 14 release. As you are probably aware, the four flagship models are expected to bring a more significant update than the iPhone 13 series. Rumors have suggested that the iPhone 14 series will have better cameras, a different notch design for the Pro models, and features such as satellite-based text messaging.
Having said that, we will have to wait and see how things play out for Apple (and the rest of the market).