Apple aims to increase iPhone production by 4% through March 2021

Apple has notified several of its iPhone suppliers that it plans to increase iPhone production to make about 213 million iPhone units in the 12 months through March 2021, up 4% from the same period a year ago, Nikkei Asian Review reports.

Apple aims to increase iPhone production by 4% through March 2021. Image: Rumored iPhone 12 design
Apple’s rumored iPhone 12 design

Naoki Watanabe and Hideaki Ryugen for Nikkei Asian Review:

The company 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… Shipments for the necessary components have already begun… Apple is therefore gearing up for the year-end shopping season by increasing inventories of new models… A display procurement manager said: “Apple may want to adjust inventories so that they have sufficient stocks in the fall and on Christmas.”

Apple is expected to turn out roughly 200 million iPhones this year, about 10% fewer than its previous estimate of nearly 220 million phones before the coronavirus outbreak.

The company’s supply chain relies heavily on China, and operating rates at assembly plants run by Taiwan’s Hon Hai Precision Industry and others in China remained sluggish through March. While the disruption in Apple’s China supply chain appears to be easing, restrictions on operations at parts and semiconductor factories in the Philippines and Malaysia remain in place. With supplies still uncertain, Apple appears to be prioritizing inventory.

MacDailyNews Take: Regardless of the current coronavirus situation, the first 5G iPhones will usher in a multi-year super cycle that won’t end until long after the COVD-19 pandemic becomes a bad memory. Apple is smartly preparing by increasing iPhone production.

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