Apple is asking suppliers to “crank out” components for its upcoming 5G iPhone lineup, despite some fears that it could launch to weak demand as a result of COVID-19.
A new report from Nikkei Asian Review explains that the Cupertino company is said to have confirmed plans to make around 213 million iPhone units in the 12 months through March 2021 — an increase of 4 percent over the same period last year.
Apple “is expected to build up inventories of its new 5G phones due to concerns over possible component shortages, despite the possibility of falling global demand,” reads the report.
Apple recently announced a new entry-level smartphone called the iPhone SE, and production will be split approximately 50-50 between the SE and the new 5G iPhones, according to the publication’s sources.
Most of Apple’s retail stores outside of China remain closed due to the coronavirus pandemic, making it difficult to gauge demand. But the idea behind the production boost seemed to be to ensure that Apple had enough inventory for the holiday shopping season, although some suppliers the Nikkei Asian Review spoke to expressed skepticism that demand would be as strong as Apple expected.
“Apple’s production outlook is pretty bullish, and we will need to assess whether it is based on a realistic demand [forecast],” one executive at a components maker told Nikkei Asian Review. “Actual production could be 10% to 20% lower.”
Nikkei warns that Apple could revise its forecast before orders are officially placed with suppliers in May and June. Should the pandemic continue to have a big impact, its numbers could fall.
Apple is expected to produce around 200 million iPhone units this year, which is around 10 percent fewer than the company’s previous estimate of almost 220 million units, thanks to the coronavirus.