Apple is reportedly scrapping plans to increase production of its new iPhone 14 due to lower-than-anticipated demand.
The tech giant has told suppliers to abandon preparations to boost assembly of the new line of products, Bloomberg News is reporting.
Apple initially estimated that surging demand would necessitate an additional 6 million units on top of original plans for 90 million for the second half of this year, according to Bloomberg.
But the company now believes that it should produce no more than 90 million iPhone 14 models — which is the same number that was produced during the same period last year.
The Post has sought comment from Apple. The Cupertino, Cal.-based company’s stock price was down nearly 4% in pre-market trading on Wednesday.
Economists say that fears of a global recession, soaring levels of inflation, and geopolitical unrest caused by the war in Ukraine is causing demand for products to shrink.
Market tracker IDC estimates that the smartphone market will contract by 6.5% this year to 1.27 billion units, according to Bloomberg.
“The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market,” said IDC research director Nabila Popal.
“High inventory in channels and low demand with no signs of immediate recovery has OEMs [original equipment manufacturers] panicking and cutting their orders drastically for 2022.”
Bloomberg cited “people familiar with the matter” as saying that demand is higher for the more expensive iPhone 14 Pro models compared to the basic version.
One Apple supplier has been told to place more emphasis on producing the higher-priced variety iPhones, according to Bloomberg.
Earlier this week, Apple said it would shift its manufacturing of the iPhone 14 from China to India due to ongoing COVID lockdowns that have disrupted industry as well as geopolitical tensions in the region.
“The new iPhone 14 lineup introduces groundbreaking new technologies and important safety capabilities. We’re excited to be manufacturing iPhone 14 in India,” Apple said in a statement.
Apple unveiled its latest line-up of iPhones earlier this month. They will have improved cameras, faster processors and longer lasting batteries at the same prices as last year’s models.
India is the world’s second-largest smartphone market after China but Apple iPhone sales have struggled to capture a large share of the market against cheaper smartphones from competitors.