Apple is slashing its planned production of the iPhone 12 mini for the first half of this year as part of a broader adjustment to output plans that the company formulated late last year, Nikkei Asia reports Wednesday.
Apple is cutting orders for all iPhones by around 20% vs. the prior holiday quarter, Nikkei Asia reports, citing “sources familiar with the matter,” with the majority of cuts attributed to the iPhone 12 mini, Apple’s smallest and lowest-priced 5G-enabled iPhone.
Late last year, Apple told suppliers to secure components and parts for up to 96 million handsets, including the entire iPhone 12 series — its first 5G-enabled lineup — for the first six months of 2021. The total also included older iPhone 11 and the iPhone SE models… The company is now targeting production of around 75 million units — slightly higher than iPhone shipments in the same period last year. The company told suppliers that it still intends to build 230 million iPhones for 2021, an increase of more than 11% from last year, sources said.
The biggest revision is for components and parts for the 5.4-inch iPhone 12 mini, multiple sources said, which retails for around $699. Some suppliers were even asked to temporarily stop building components specifically for the mini, a source told Nikkei. The mildest estimate was that Apple will cut planned [iPhone 12 mini] production by more than 70% for the six months through June.
The adjustment of production levels for the iPhone 12, iPhone 12 Pro and Pro Max was comparatively mild and demand for those models remains relatively healthy, several people said. “Some of the components and parts for the mini have been reallocated to the iPhone 12 Pro and iPhone 12 Pro Max,” said another person with direct knowledge of the matter.
The change in production plans poses a major challenge for Apple suppliers, who will be forced to quickly adjust their production utilization rates and labor resources, especially those that primarily supply parts for the iPhone 12 mini. Apple itself, meanwhile, is still enjoying healthy demand for its premium models. Demand for the iPhone 11, first launched in autumn 2019, moreover, remains robust in emerging markets like India.
MacDailyNews Take: As expected, Apple is adjusting production based on the iPhone mix they’ve seen and are extrapolating for the coming quarters. It’s been known for some time that the response to the iPhone 12 mini was tepid vs. Apple’s flagship iPhone 12 Pro Max and the other iPhone 12 models.
And, so, yes, this is as we predicted many years ago; people gravitate to larger displays (with their attendant larger batteries):
In general, the only people who still think they want a 4-inch iPhone are those who do not yet own a 4.7-inch iPhone 6 or 5.5-inch iPhone 6 Plus. — MacDailyNews, December 5, 2014