Apple to make fewer iPhones in response to weaker supply and demand

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Enlarge / The back of the iPhone 13.

Samuel Axon

According to a new report in Bloomberg, Apple told suppliers that demand for the iPhone 13 line of smartphones may not meet the company’s initial expectations, due to supply constraints.

Apple planned to ship 90 million iPhone 13, iPhone 13 mini, iPhone 13 Pro, or iPhone 13 Pro Max devices to consumers, but the company slashed production targets by 10 million phones due to parts shortages. Consumers, meanwhile, have had to wait two, three, or even four weeks for their iPhone 13 orders since the phones launched in September.

Apple originally told vendors that it would represent 10 million units again in early 2022, once the supply improved. But according to the Bloomberg report, Apple has noticed weakening demand and the company no longer intends to meet that 90 million target in that time frame.

The demand deficit could be attributed to a number of things and can be difficult to explain definitively. On the one hand, it’s possible that consumers saw the iPhone 13 as an insufficiently major update over last year’s iPhone 12, which sold like hotcakes in what the Business world calls it a supercycle – a product launch window in which one factor or another like new features or external economic forces is causing consumers to upgrade in greater numbers than usual. The iPhone 13 offered marked improvements in camera and battery life over the iPhone 12, but little more.

On the other hand, the shortfall could also be due to consumers deciding that an iPhone 13 is not worth buying, given the long waits. Or maybe they’ve read rumors that next year’s model is expected to be a major overhaul with substantial new features. Economic factors such as new variants of COVID-19, inflation, etc. could also contribute.

That said, Apple is still on track for a solid quarter – it might not be as huge as the company and its shareholders had hoped, since the iPhone accounts for about half of the company’s revenue. And the iPhone 13 is increasingly easy to locate in some (but not all) markets. In some areas of the United States, for example, some configurations now ship in about a week, and phones are sometimes available for store pickup.

Little is known for sure about next year’s flagship iPhone, but some leaks and reports have indicated that it will have a new design and may do away with the charging port altogether. They also said that Apple was unlikely to continue offering the mini version of the iPhone as it still fell short of expectations as consumers flocked to larger and larger screens.

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