Apple is planning to keep iPhone production roughly flat in 2022, asking suppliers to assemble roughly 220 million iPhones, about the same as last year, Bloomberg News reports citing “people familiar with its projections.”
Market forecasts have hovered closer to 240 million units, driven by an expected major update to the iPhone in the fall. But the mobile industry has gotten off to a difficult start to the year and production estimates are down across the board.
The worst inflation in decades, a war in Ukraine and supply-chain turmoil all threaten to weigh on sales in 2022. Strategy Analytics has predicted that overall smartphone shipments will contract as much as 2% in 2022, and TrendForce has twice downgraded its full-year production forecast in recent weeks. IDC and Bloomberg Intelligence analysts [had] both forecast about 240 million iPhones for this year earlier in the period.
Apple already warned that supply problems will impact sales by $4 billion to $8 billion in the current quarter, largely because Covid-19 lockdowns are roiling production lines in China. And the whole tech industry is bracing for a slowdown in consumer spending as rising fuel and materials prices push up the cost of everyday essentials.
MacDailyNews Take: With flat iPhone production (which can be increased at any time), Apple’s iPhone will be just fine, but the real growth for the company is in Apple’s Services which, with an installed base of some 2 billion devices, and growing, increasingly becomes a larger portion of Apple’s revenue generators.
Last quarter, Apple Services revenue surged 17% to record quarterly revenue of $19.8 billion. At the end of March, Apple had more than 825 million paying subscribers worldwide (comprising both Apple-branded and third-party services), up more than 165 million in the last 12 months, and up from 785 million at the end of 2021.
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