Apple Asks Suppliers to Produce 85 Million iPhone 15 Units, Aims to Keep Shipments Steady in 2023

Apple Asks Suppliers to Produce 85 Million iPhone 15 Units, Aims to Keep Shipments Steady in 2023

Apple is reportedly asking its suppliers to manufacture approximately 85 million units of the iPhone 15 for the current year, which is similar to the production volume of the previous year. Despite uncertainties in the global economy and an expected decline in the overall smartphone market, Apple aims to maintain shipment levels.

One strategy the company plans to adopt to boost revenue is the consideration of raising the prices for the Pro models of the iPhone 15. By doing so, they anticipate a positive impact on their overall financial performance.

Apple’s significance as the world’s most valuable company extends beyond its own operations, as its business activities have a wide-reaching impact on thousands of suppliers and millions of employees globally. This includes not only the United States and China but also countries like Vietnam and India, where Apple’s supply chain and manufacturing operations generate employment and economic activity.

Additionally, it’s worth noting that the company’s shares have experienced a significant increase of around 50 percent during the current year, leading to a remarkable market capitalization of $3 trillion (approximately Rs. 2,45,45,295 crore).

The electronics industry, including smartphone and computer manufacturers like Apple and its competitors, is facing significant declines in demand due to various factors. Both corporations and consumers are delaying purchases because of increasing prices and economic uncertainty.

In the US, the Federal Reserve is expected to raise interest rates in an attempt to combat inflation, which adds to the economic challenges faced by companies like Apple. Meanwhile, China’s economy, being the world’s second-largest, experienced a slowdown in the second quarter, further impacting the global electronics market.

Apple’s production schedule is closely monitored and analyzed because of its far-reaching impact on the industry. Many large corporations, including Samsung Electronics, Taiwan Semiconductor Manufacturing Company, and Foxconn Technology Group, depend on Apple’s iPhone business to drive their own growth and profit margins.

In 2018, Apple made the decision to stop disclosing specific shipment numbers, aiming to shift investor focus towards more predictable aspects of its business, such as its App Store.

Despite facing challenges, Apple has adjusted its production plans to address certain issues. For instance, the company had to reduce its forecast for upcoming entry-level iPhone models by approximately 2 million units due to a production challenge with CMOS image sensors. However, to compensate for this, Apple increased orders for higher-priced iPhone Pro models.

Overall, the electronics industry is navigating through a complex and uncertain economic environment, and Apple, as a major player, is actively adjusting its strategies to maintain growth and profitability.

The electronics industry, encompassing smartphone and computer manufacturers such as Apple and its competitors, is facing significant drops in demand owing to various factors, including rising prices and economic uncertainties. Both corporations and consumers are delaying purchases due to these challenges.

In the US, the Federal Reserve is anticipated to raise interest rates as a measure to combat inflation, further contributing to the economic difficulties faced by companies like Apple. Simultaneously, China’s economy, being the world’s second-largest, has experienced a slowdown in the second quarter, impacting the global electronics market.

Apple’s production schedule is under close scrutiny because of its extensive influence on the industry. Numerous major corporations, including Samsung Electronics, Taiwan Semiconductor Manufacturing Company, and Foxconn Technology Group, rely on Apple’s iPhone business to drive their own growth and profitability.

In 2018, Apple opted to withhold specific shipment numbers, aiming to divert investor attention to more predictable aspects of its business, such as its App Store.

Despite these challenges, Apple has made adjustments in its production plans to address specific issues. For instance, the company had to lower its forecast for upcoming entry-level iPhone models by approximately 2 million units due to difficulties with CMOS image sensors. Nevertheless, Apple compensated for this setback by increasing orders for higher-priced iPhone Pro models.

Overall, the electronics industry faces a complex and uncertain economic environment, prompting Apple, as a major player, to actively adapt its strategies to sustain growth and profitability.

Apple’s performance in the smartphone market has remained relatively stable compared to some of its competitors that manufacture devices using the Android operating system.

While several Android-based smartphone companies have been facing challenges, Apple’s phone sales have also experienced a decline for eight consecutive quarters, including an 8 percent drop in the June quarter, as reported by Counterpoint Research. Among the struggling Android brands, both Vivo and Xiaomi suffered declines of more than 10 percent in their sales.

Despite the decline in sales, Apple managed to increase its market share to 17 percent in the most recent quarter, according to Counterpoint estimates. This increase in market share can be attributed to the continuing growth in demand for phones priced at $600 (approximately Rs. 49,000) or more, which is the segment where Apple primarily operates.

Overall, while Apple faced a 2 percent decline in sales during the mentioned quarter, it still managed to gain market share due to sustained demand for its higher-priced devices, setting it apart from the challenges faced by several Android-based smartphone companies.

According to the analysts at Counterpoint, Apple is taking advantage of the “premiumization” trend, which involves a focus on premium and higher-priced products. This strategy has allowed Apple to achieve significant market shares in multiple new markets, some of which were not traditionally considered its core markets.

One such example highlighted in the report is India, where Apple experienced remarkable growth. In the second quarter of 2023, Apple’s sales in India grew by an impressive 50 percent compared to the same period in the previous year. This growth in India signifies Apple’s successful expansion into markets that were previously considered less receptive to high-end devices.

By capitalizing on the premiumization wave and expanding into new markets, Apple has been able to achieve record shares in these regions, contributing to its overall success in the smartphone industry.