In order to weather a global electronics slowdown, Apple Inc. has ordered suppliers to produce at least as many of its next-generation iPhones this year as in 2021. The company is relying on rich customers and shrinking competition.
Despite dismal estimates for the smartphone industry, the tech giant is instructing its assemblers to produce 90 million of its newest smartphones, on pace with last year. According to one of the people, the Cupertino, California-based company still plans to produce around 220 million iPhones overall for 2022, which is also on par with last year. Apple appears to be confident about weathering a decline in spending on iPhones and other devices, according to predictions that are closely guarded trade secrets. The top chipmaker in China warned on Friday that mobile device manufacturers had started to freeze orders. According to IDC, the global handset market will contract 3.5% in 2022 after declining 9% in the June quarter.
The announcement caused shares of Apple suppliers in Asia to increase. Pegatron Corp., a Taiwanese company that builds iPhones, increased by as much as 3.6%, marking its largest gain in five weeks, while Japan Display Inc. experienced its most two-month increase of 5%. Both TDK Corp. and Murata Manufacturing Co. increased by as much as 5.3%.
The greater demand for Apple's new portfolio is due to a consumer base that is still prepared to spend money on high-end electronics at a time when Android devices are struggling, the sources claimed. The competition for high-end cellphones has also decreased as a result of Huawei Technologies Co.'s virtual extinction. When Hon Hai Precision Industry Co. indicated this week that sales of its smart consumer electronics goods could remain relatively stable in 2022, the company that assembles the majority of the world's iPhones offered a hint to Apple's resiliency. Apple's representative declined to respond.
A lower-than-expected report for US inflation this week gave rise to optimism that interest rate increases won't be as drastic as predicted. However, market watchers issued a warning that the economic picture was still dire. Apple is nevertheless pressing ahead with its ambitions for its flagship product, which generates approximately half of its income and serves as the primary entry point to lucrative services. According to Bloomberg News, Apple will introduce four new iPhone models that it expects will advance technology more than the 2021 models. The front-facing camera on the iPhone 14 Pro models is anticipated to be significantly better; there will be a new 48MP rear camera system, slimmer bezels, a quicker A16 CPU, and a new notch with a pill-shaped cutout for Face ID and a hole punch for the camera.
Prior to 2021, Apple has consistently produced around 75 million units for a new device's initial run through the end of the year. In anticipation of the first new iPhone after the introduction of the Covid vaccinations, it raised its objective for 2021 to 90 million. Pegatron Corp. is one of the company's suppliers of iPhone assembly, and it reported record revenues and profits in that fiscal year.