Apple to Not Reduce iPhone Production Despite Market Slowdown

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.

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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.