TAIPEI – Apple plans to produce 96 million iPhones in the first half of 2021, an increase of nearly 30% year-on-year, as Nikkei Asia learns, as demand for its first 5G handsets increases amid epidemics.
Cupertino-based technology company has asked suppliers to build between 95 million and 96 million iPhones, including the latest iPhone 12 range and the old iPhone 11 and iPhone SE, and many who are familiar with the matter have told Nikkei Asia – key shortages in the industry threaten that target.
People have said that Apple plans to build 230 million iPhones by 2021, including older and newer models, according to a temporary full-year forecast shared with its suppliers. This represents a 20% increase from 2019, but the target will continue to be reviewed and revised in response to any changes in consumer demand.
“Planned production for the next quarter and the decision is made for the next quarter and the vision is very bright,” a top Apple supplier executive told Nicky. “The iPhone 12 Pro and iPhone 12 Pro Max in particular are stronger than we estimated, while demand for the iPhone 12 is in line with the forecast, but the iPhone 12 Mini is a bit sluggish,” the person added.
Apple saw two consecutive years of decline in smartphone exports in 2018 and 2019. In the first nine months of this year, its shipments were around 116 million iPhones, down 1% year-over-year, according to research firm ITC.
Much of that improvement came from the iPhone 12 range – Apple’s response to Samsung Electronics and Huawei Technologies’ 5G smartphone offerings – which have enjoyed strong demand since it hit store shelves this quarter. The provisional production plan for 2021 is almost equal to the record 231.5 million iPhones shipped in 2015.
Apple is preparing an aggressive production schedule for 2021, including the MacBook Pro and iMac Pro for its high-end computers, according to two people familiar with the matter. The company is bringing self-designed CPUs built using British chip designer arm technology to replace the Intel Central processors in its system line. Apple has already introduced three MacBook models running on its M1 Central processor in late 2020 and announced that it will take about two years to fully convert to locally designed CPUs. One of the people said that the home entertainment device for video-on-demand services will work next year on the new Apple TV, the American technology company.
Apple’s strong iPhone orders come as the smartphone industry faces two ups and downs: a severe component shortage and stiff competition for Huawei’s market share.
In anticipation of a post-corona virus boom in consumer demand, device makers will need months to produce enough vital components – especially semiconductors and displays.
Apple has already taken components reserved for iPods and redistributed them to the iPhone 12 range, which has affected 2 million to 3 million iPods produced this year, according to Nikkei Asia.
Meanwhile, smartphone Pierre Xiaomi has given suppliers a bold production target of 240 million smartphones for next year, which could increase the industry-wide shortage. As Hawaii retreats due to US sanctions, Xiaomi, like its counterparts, is trying to expand its foothold abroad.
During disasters, Apple tried to store as many processor chips as possible to avoid supply chain disruptions. Many market observers, including CLSA and Jefferies, have suggested that Apple cut some orders for its A14 processor chips for the January-March period, although industry executives told Nikkei that this represents a “seasonal adjustment” and overall demand for the first half of 2021 is still healthy. .
“IPhones have many components that need to go through, and they are not just core processors,” said one chip industry executive. “Apple’s adjustment now means it has enough processors to complete its production plan, but is still chasing other necessary components.”
Suppliers were initially worried about the possibilities of the 5G iPhone 12 range after the epidemic disrupted development and delayed its release by a month. In April, when the global health crisis first ravaged the United States, Apple considered waiting until next year.
It has received a warm welcome, however, and consumers in the US and China are currently facing up to four weeks of waiting time for some iPhone 12 Pro models.
Jeff Pu, an analyst at GF Securities, said Nikkei expects high demand for Asia by 2021, and that iPhone exports will “definitely” return to growth next year. However, there are still uncertainties about the size of the reverse, the analyst said.
“The market is very optimistic about 2021, but we need to be a little more careful about whether it’s really that great, or whether it will live up to everyone’s expectations. It’s not worth losing, “said Pu.” Also, we’m a little more conservative about its next new iPhone lineup, which is set to be released in the second half of 2021. We have not seen much excitement for the new model in 2021 since the launch of the 5G iPhone this year. “
The company estimates that Apple will ship about 220 million iPhones next year.
Apple declined to comment on the story.