Companies in Apple’s supply chain are reportedly being asked to prepare for sharply lower iPhone orders this year as global smartphone demand wanes.
According to a new report from Nikkei Asian Review, Apple expects total shipments of iPhones to be launched this year to be 80 million, less than the 100 million shipments that Apple planned for around the same time last year.
“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,” one of the four sources, who is in the supply chain, told the Nikkei Asian Review. “For the three new models specifically, the total planned capacity could be up to 20% fewer than last year’s orders.”
The report added to concerns that consumer passion for new editions of the iconic smartphones may be cooling after years of massive growth, sending shares in Apple and many of its major suppliers lower and weighing on global stock markets.
Analysts have also predicted a decline in smartphone sales as markets like China have slowed down and consumers are less willing to upgrade their smartphones because they either offer non-compelling upgrades or their current device is performing to their expectations.
Apple CEO Tim Cook, however, struck an upbeat tone last month when his company posted a stronger-than-expected bottom line for the three months ending in March, the company’s second quarter, and said revenues hit $61.1 billion thanks to the sales of 52.2 million iPhone units.
Apple also issued a robust third-quarter outlook, forecasting sales of between $51.5 billion USD and $53.5 billion, suggesting still-solid demand for its smartphone suite despite persistent concerns that global demand is waning.
“I don’t buy the view that market’s saturated,” Cook told investors on a conference call following the company’s earnings last night. “I don’t see that from a market point of view or – and certainly not from an iPhone point of view.”
Apple is planning to release three new phones this fall, including a model with some of the flagship iPhone X’s features but a lower price tag, and the largest iPhone ever.