Apple Cuts iPhone 13 Manufacturing Targets Due To Slowing Of Demand

Apple Cuts iPhone 13 Manufacturing Targets Due To Slowing Of Demand

..According to a recent news report, Apple has informed suppliers that demand for the iPhone 13 series may fall short of the company’s initial estimates due to supply bottlenecks. Apple had intended to send 90 million iPhone 13, iPhone 13 mini, iPhone 13 Pro, and iPhone 13 Pro Max smartphones to customers. However, because of part shortages, the company reduced its manufacturing targets by 10 million phones. So, since the phones’ September release, customers have to face wait periods of two, three, or four weeks for their iPhone 13 orders. Apple previously informed suppliers that it would make up the 10 million devices in early 2022 when supply improved. So, Apple cut iPhone 13 manufacturing targets because of some reasons.

However, according to the news reports, Apple has detected a drop in demand for the iPhone 13 series. As a result, it will no longer plan to meet the 90 million objectives in that time frame. According to the recent news reports, Apple is still expecting to meet the average prediction of $119 billion in overall sales for the Christmas season. But iPhone 13 sales will be less spectacular than anticipated. If news about dwindling demand is accurate, it might counter hopes for the iPhone 13.

Apple Cuts iPhone 13 Manufacturing Targets
iPhone 13

Why did the demand for iPhone 13 drop?

The lack of demand might be caused by different reasons, some of which may be difficult to pinpoint. But some significant reasons made apple cut iPhone 13 manufacturing targets.

  • Most iPhone owners saw the iPhone 13 as a minor upgrade to last year’s iPhone 12, which still has a higher demand. In the commercial world, iPhone 12 is referred to as a super cycle. The reason for it is, its features force consumers to upgrade in more significant numbers than usual. The iPhone 13 has a powerful camera and battery life improvements over the iPhone 12, but nothing else. iPhone 13 vs. iPhone 12
  • Furthermore, the slowing of demand might be due to people deciding that an iPhone-13 isn’t worth the effort to purchase. Or maybe they’ve heard whispers that next year’s iPhone model would be a complete redesign with many new features. Finally, economic considerations such as new COVID-19 variations, inflation, and other issues may also affect the slowing of demand. In other words, the unmodified design of the iPhone 13 makes it nearly unnoticeable from the previous model.
  • Sometimes, Apple’s supply-and-demand problems occur when the US economy deals with its own set of issues, most notably inflation. For example, while the price of the iPhone 13 models has remained the same, other prices and expenses have risen. And it might make buyers hesitant to pay anywhere from $699 to $1,099 on a new iPhone, even with the discounts Apple gives for exchanging in the old smartphones.
  • Another reason why the demand for the iPhone 13 is slowing down is the problems with iPhone 13 device. The iPhone 13 owners complained about some issues with their phones. Some of those problems are in first- and third-party apps, battery life, face ID, network issues, CPAP masks problems, iCloud account login issues, and troubles on CarPlay and Bluetooth. In addition, some iPhone 13 customers have also reported touch screen problems where the phone’s display does not respond to swipes and commands.

 

Unconvinced Buyers

During Apple’s most recent earnings call in October, CEO Tim Cook stated that demand for new devices was highly robust and fueled by the excitement in the latest iPhone handsets, iPad tablets, and other devices. The previous financial year generated approximately $111.4 billion in sales. He mentioned supply restrictions as the company’s most significant problem. He explained that the inability to obtain sufficient components, especially chips, would cost Apple more than $6 billion approximately in revenue in the Christmas season.

Apple’s partners have also suffered as a result of the restrictions. For example, Taiwan Semiconductor Manufacturing Company, the apple company’s primary chip supplier, reported a 12% drop in October sales in the previous couple of months to TWD 134.5 billion approximately.

Hon Hai Precision Industry Company, Apple’s main iPhone assembler, forecasted last month that its sales would fall this quarter from a year earlier due to reductions in consumer electronics and computing because it continues to be plagued by a chip shortage. On October 24, IQE Plc’s stock dropped by 24% after the semiconductor manufacturer warned of declining smartphone demand. However, it did not mention a specific client.

In addition, buyers’ wallets are under additional strain now. In the United States, consumer prices increased last month at the quickest annual rate since 1990. Despite more incredible income growth, an increase in the cost of food, gas, and housing expenses undermine purchasing power.

 

Apple is more exposed to the supply bottleneck than many other corporations. This is because of its enormous purchasing power and long-term supply arrangements with chip suppliers. As buyers wanted to update smartphones for 5G networks, some experts predicted that iPhone 13 models introduced in September would have a high sales year. However, Apple will not provide Christmas sales records until the end of January. In January, they will release their profits for the first quarter of its financial year 2022. So, that’s when we could know for sure how popular the iPhone 13 is. But, mainly because of the reasons mentioned above and slowing of demand, apple had to cut iPhone 13 manufacturing targets.