Apple is backing away from plans to ramp up production of its new iPhones this year after an anticipated surge in demand failed to materialize, according to people familiar with the decision. The Cupertino, California-based electronics make,r has told suppliers to end efforts to ramp up production of the iPhone 14 family of products by as much as 6 million units in the second half of this year.
Instead, the company will aim to produce 90 million phones during the period, about the same level as a year earlier and in line with Apple's original forecast for this summer, the people said. Demand for the higher-priced iPhone 14 Pro models is stronger than for the entry-level versions, according to some people. In at least one case, an Apple supplier is shifting production capacity from lower-priced iPhones to premium models, they added.
Apple fell as much as 3.3% in pre-market trading. US stock index futures also fell after the news and Nasdaq 100 contracts fell as much as 1.5%. Apple had upgraded its sales projections in the weeks leading up to the iPhone 14 launch and some of its suppliers had started making preparations for a 7% increase in orders.
China, the world's largest smartphone market, is in an economic downturn that has hit domestic handset makers and hit sales of iPhones as well. Purchases of the iPhone 14 series during its first three days of availability in China were 11% lower than its predecessor a year earlier.