Apple Inc. (NASDAQ:AAPL) has requested that its suppliers produce at least as many of its next-generation iPhones this year as they did in 2021, relying on its affluent clientele and diminishing competition to withstand the global electronics slowdown.
Despite dismal estimates for the smartphone market, the tech giant has instructed its assemblers to produce 90 million of its newest smartphones, on pace with last year, according to people with knowledge of the subject. As suggested by one of the sources, the Cupertino, California-based corporation still aims to produce around 220 million iPhones in 2022, about the same as last year.
Apple’s estimates, which are a carefully guarded secret, indicate the company is confident in its ability to withstand a decline in spending on smartphones and other products. On Friday, China’s largest chipmaker warned that mobile device manufacturers have begun freezing orders. IDC forecasts a 3.5% decline in the worldwide handset market in 2022, following a 9% decline in the quarter ending in June.
Upon hearing the news, Apple (NASDAQ:AAPL) suppliers’ shares in Asia surged. Taiwanese iPhone assembler Pegatron Corp. recorded its largest gain in five weeks, 3.6%, while Japan Display Inc. recorded its largest two-month increase, 5%. TDK Corporation was up as much as 5.3%, and Murata Manufacturing Company was up 3.7%. In a time when Android smartphones are struggling, the increased demand for Apple’s new portfolio is due to a customer base that is still prepared to spend on premium products, according to these sources. Additionally, the virtual collapse of Huawei Technologies Co. has diminished competitiveness in the premium smartphone market.
This week, Hon Hai Precision Industry Co., which assembles the majority of the world’s iPhones, predicted that sales of its smart consumer electronics items will remain relatively unchanged in 2022. Apple’s representative declined to comment. As economic and geopolitical uncertainty clouds the forecast for 2022 and beyond, the most valuable firm in the world has pledged to exercise fiscal discipline. Bloomberg reported last month that in 2023, Apple (NASDAQ:AAPL) will reduce investment and hiring for a portion of its teams.
This week, a lower-than-expected inflation estimate in the United States bolstered expectations that interest rate hikes will be less aggressive than previously believed. However, market analysts cautioned that the economic picture remained dismal.
According to Bloomberg Intelligence, Product-refresh cycles and sales of additional services to its installed base of more than 1.8 billion active devices will likely keep Apple‘s near- and medium-term revenue growth in the mid-single digits. Inflation on the rise, conflict in Europe, and persistent Covid-19 restrictions in China might lengthen the product-refresh cycle, lowering fiscal 2022 sales growth by 2% to 4% compared to the $394 billion average. Apple‘s excessive reliance on China for production is a big cause for concern, and any disruptions caused by component shortages or geopolitical difficulties might severely impede the company’s ability to meet demand.
New iPhone Models Release by Apple
Bloomberg News reports that Apple is going to release four new iPhone models that it hopes would be more innovative than the 2021 models. The iPhone 14 Pro variants are believed to include a much-improved front-facing camera, a new rear-camera system with a 48-megapixel sensor, lower bezels, a speedier A16 engine, and a redesigned notch with a pill-shaped cutout for Face ID and a camera cutout.
Featured Image: Megapixl @Bedo
