Apple, suffering from a global supply crunch, is now facing a different problem: slowing demand.
People familiar with the matter said the company has informed its component suppliers that demand for iPhone 13 series products has weakened, indicating that some consumers have decided not to try to buy this hard-to-find product.
According to Bloomberg News, due to a shortage of parts, Apple has lowered its production target for iPhone 13 this year from 90 million units by as much as 10 million units. But it is hoped that most of the shortage will be made up next year-when the supply is expected to improve. According to people familiar with the matter, the company is now informing its suppliers that these orders may not be honored because the discussions are conducted in private.
The company is still expected to usher in a record holiday, and analysts expect sales to grow in the last three months of the calendar year, an increase of 6% to 117.9 billion U.S. dollars (approximately Rs. 88,405.55 billion). But this will not be the sensational quarter that Apple and Wall Street originally envisioned. Shortages and delivery delays have frustrated many consumers. As inflation and omicron variants bring new concerns to shoppers who are tired of epidemics, they may abandon some purchases.
This may mean skipping the iPhone 13 altogether and waiting for the upgrade when its successor comes out next year. In the current lineup, the standard model starts at US$799 (approximately Rs 59,890), and the Pro starts at US$999 (approximately Rs 74,890). It is considered a modest update of the iPhone 12, which has a brand new design. The 2022 model is expected to have even greater changes, giving some shoppers reason to wait.
Apple Inc., based in Cupertino, California, declined to comment. The iPhone is Apple’s flagship product, accounting for about half of its revenue of 365.8 billion U.S. dollars (approximately 274,220 billion rupees) in the previous fiscal year. The launch of upgrades is a delicate dance. With the introduction of the iPhone 13, Apple and wireless carriers have introduced aggressive discount programs to stimulate purchases. In some cases, users of iPhone 12 or earlier can purchase iPhone 13 for very little or even free.
Although discount programs are still available, some discount programs offer smaller savings compared to when the new model was first launched. During Apple’s last earnings conference call in October, CEO Tim Cook stated that demand for new products was “very strong” — driven by interest in new products, the latest iPhones, iPad devices and other Equipment-and the company is expected to achieve a record holiday quarter. In the same period last year, sales were 111.4 billion U.S. dollars (approximately 8,351 billion rupees).
He pointed out that supply constraints are the company’s biggest challenge. Cook predicts that in order to obtain enough components, especially chips, Apple’s revenue in the holiday quarter will exceed $6 billion (approximately Rs 44,980 crore).
News Source : Gadgets 360
