Apple released record iPhone sales last holiday season, but it looks less optimistic at the end of this year. According to Bloomberg, citing “informed sources,” the company reportedly told component suppliers that demand for the iPhone 13 series has weakened.
Apple no longer discloses the number of iPhones it sells each quarter, but Bloomberg reported in October that due to continued chip shortages, the technology giant has cut production of 10 million iPhones. Apple CEO Tim Cook said that due to shortages and the impact of covid-19 on the manufacturing industry, the company’s fourth-quarter earnings fell by $6 billion.
According to reports, Apple hopes to make up for lost ground when supply improves next year, but due to declining demand, the opportunity to do so may be disappearing. Now, the company may be forced to tell suppliers that its expected sales in 2022 may not meet the requirements.
Whether this means that supply can keep up with demand remains to be seen. Demand may continue to exceed supply. In this case, although fewer people are calling for Apple’s latest phones, the availability of the iPhone 13 will still be out of reach.
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In any case, Apple’s supply and demand curve is now heading in the wrong direction. At the end of the supply shortage forecast—production will eventually return to normal (2023 is our closest time to consensus)—declining demand, especially around the holidays, raises a more complex issue.
This is not the first time Apple has found itself in this situation, rebounding from a slowdown in growth, but has just set record sales. Even during the pandemic, Apple broke previous records, with iPhone sales increasing 66% (surge to 47.9 billion U.S. dollars), and sales in the March quarter of 2021 reached 89.6 billion U.S. dollars.
We can only speculate on what caused the decline in demand for the iPhone, but it can be said with certainty that the shortage of chips and the resulting trouble in buying products are one of the reasons. The release of the iPhone 13 was a success. Apple enthusiasts lined up in physical stores and lined up to buy online. However, although the new devices are excellent, they are not much different from the previous models. Part of the reason for the decline in demand may be that people hang on their devices for long periods of time while waiting for the next important feature (such as USB-C, for Apple?!).
In any case, once the chip supply is sorted out, we expect Apple to rebound. Even if demand for the iPhone continues to slow, Apple is already planning its successor.
Post time: Dec-08-2021
