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Apple plans to increase iPhone production by 30% for the first half of 2021

Apple plans to increase iPhone production by 30% for the first half of 2021

TAIPEI – Nikkei Asia has learned that Apple plans to produce up to 96 million iPhones for the first half of 2021, an increase of nearly 30% year-on-year, after demand for its first 5G phones ever soared amid the pandemic.

The Cupertino-based tech giant has asked suppliers to build roughly 95 to 96 million iPhones, including the latest batch of iPhone 12, iPhone 11 and older iPhone SE, several people familiar with the matter told Nikkei Asia. – In spite of Industry-wide shortage A major component could threaten this goal.

People said the initial full-year projections that Apple has shared with its suppliers indicate that it plans to build up to 230 million iPhones in 2021, including old and new models. They added that this represented a 20% increase from 2019, although the target would be subject to regular review and revision in response to any changes in consumer demand.

“The planned production for the next quarter and the next quarter has been decided, and the outlook is very bright,” an executive at a major Apple supplier told Nikkei. The person added: “Both the iPhone 12 Pro and iPhone 12 Pro Max are particularly stronger than we expected, while the demand for the iPhone 12 is in line with expectations, but the iPhone 12 mini is a bit slow.”

Apple recorded two consecutive years of decline in smartphone shipment in 2018 and 2019. In the first nine months of this year, its shipments reached nearly 116 million iPhones, down only 1% from a year, according to data from research firm IDC.

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Much of the improvement came from the iPhone 12 range – Apple’s answer to 5G smartphone offerings from Samsung Electronics and Huawei Technologies – which has been in strong demand since it hit store shelves this quarter. The tentative production plan for 2021 is roughly equivalent to a record 231.5 million iPhones shipped in 2015.

Two other people familiar with the matter said that Apple is also preparing a strict schedule for the production of high-end computers, including the MacBook Pro and iMac Pro, for 2021. The company is in the process of replacing the Intel CPUs in its computer family with self-designed CPUs. Created using technology from British chip designer Arm. Apple already introduced three MacBook models powered by its M1 CPU in late 2020 and announced that it would take about two years to fully migrate to internally designed CPUs. One person said the US tech giant is also working on a new Apple TV, a home entertainment device for video-on-demand services, for next year.

Apple’s strong iPhone orders come as the smartphone industry faces two disruptions: a serious component shortage and fierce competition for Huawei’s market share.

Hardware makers are racing to secure enough Critical ingredients – Especially semiconductors and displays, which take several months to manufacture – in anticipation of the post-coronavirus surge in consumer demand.

Nikkei Asia reports that Apple has already taken components dedicated to iPads and reassigned them to the iPhone 12 range, a move that affected the 2 million to 3 million iPads produced this year.

Meanwhile, the Xiaomi smartphone counterpart gave suppliers a bold target for production 240 million smartphones For the next year, which is likely to exacerbate the shortage across the industry. Like its peers, Xiaomi is trying to expand its overseas presence with Huawei backing down due to US sanctions.

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During the pandemic, Apple tried to stock up on as many processor chips as possible to avoid supply chain disruptions. Several market watchers, including CLSA and Jefferies, indicated that Apple had cut some orders for its A14 processor chipset from January to March, although industry executives told Nikkei that this likely reflects a “seasonal adjustment.” “The overall demand for the first half of 2021 is still healthy.

“There are many components that are supposed to go into iPhones, not just the core processors,” said one chip maker. “Apple’s modification indicates that they now have enough processors to meet their production plan but are still chasing after other required components.”

Suppliers were initially concerned about the prospects for the iPhone 12’s 5G range after the pandemic disrupted development and delayed its launch by about a month. In April, when the global health crisis was sweeping the United States for the first time, Apple thought about it Wait until next year To reveal the lineup.

However, it is well received, as consumers in the US and China are currently facing wait times of up to four weeks for some iPhone 12 Pro models.

Jeff Bo, an analyst at GF Securities, told Nikkei Asia that most suppliers and market observers are expecting rosy demand for 2021, and iPhone shipments will “definitely” return to growth next year. However, doubts remain about the size of the upside, the analyst said.

“The market is very optimistic about 2021, but we have to be a little careful about whether it will really be this large, or quite in line with everyone’s expectations. Apple’s iPhone shipments will definitely see a rebound for next year, but overall it will see no benefit from the loss of Huawei. Its market share is like that of other players such as Samsung, Xiaomi and Oppo. ” “Also, we are a bit conservative about the upcoming new iPhone lineup set to be launched in the second half of 2021. We don’t see excitement for the new model in 2021 after the first iPhone 5G lineup this year.”

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Pu expected Apple to ship about 220 million iPhones next year.

Apple declined to comment for this story.

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