Apple abandons plans to increase iPhone 14 production amid weak demand

American Apple Inc. (NASDAQ:AAPL) is abandoning plans to increase production of new iPhone 14 models due to weak demand, Bloomberg reported, citing people familiar with the matter.

The company told suppliers that it no longer intends to push for an increase in iPhone 14 production by 6 million smartphones in the second half of this year, the agency’s interlocutors noted. Instead, Apple aims to produce 90 million smartphones, almost the same as in the second half of the previous year and in line with the company’s guidance released this summer.

Apple updated production forecasts ahead of the presentation of the iPhone 14. Some of the company’s suppliers were preparing for a 7% increase in orders for devices, Bloomberg notes.

But as it turned out in reality, the demand for new models was limited. iPhone sales in China, the largest smartphone market, have been declining recently due to the economic downturn. Domestic iPhone 14 orders in the first three months after going on sale were down 11% from iPhone 13 orders in the same period last year, according to Jefferies.

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In addition, global electronics demand has been subdued this year due to high inflation, recession fears and supply chain disruptions. The smartphone market is expected to contract by 6.5% in 2022, according to an IDC forecast.

Meanwhile, Bloomberg sources noted that demand for more expensive iPhone 14 Pro models is in some cases higher than demand for launch versions. In this regard, one of the company’s suppliers plans to focus on the production of a smartphone from a more expensive segment.

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