Apple To Ramp Up iPhone Production To Cash In On The 5G-Handset Demand Surge!

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Apple Inc. (NASDAQ: AAPL) is all set to squeeze every penny out of the surging demand for 5G enabled devices.

According to a new media report, the iPhone maker is planning to produce close to a whopping 96 million iPhones for H1 2021, a 30% YoY increase, after the pandemic saw a huge surge for the demand of 5G handsets.

Sources familiar with this development reported that the Cupertino-based tech giant asked their suppliers to build 96 million iPhones which would include the newly launched iPhone 12 range along with the older iPhone 11 and iPhone SE.

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The sources also informed that for the entire 2021 period, Apple plans to produce close to 230 million iPhones including both the old and new models, a 20% rise when compared to 2019. However, the target is subjected to revision based on any change in consumer demand.

For two consecutive years – 2018 and 2019, Apple logged a decline in smartphone shipments. But, in 2020, according to data from the research firm IDC, Apple’s shipments for the first nine months of 2020 stood at around 116 million iPhones, down by 1% on the year. This improvement came with the arrival of Apple’s answer to Samsung and Huawei’s 5G smartphone offerings – iPhone 12 range of devices. 

Since hitting the store shelves in this quarter the iPhone 12 range of devices have been enjoying very strong demand. Therefore, it makes sense for Apple to ramp up their production of iPhones especially when the entire smartphone industry currently is facing a serious component shortage.

As of now, device makers, in anticipation of a post-COVID surge in consumer demand, are racing to secure enough crucial components like semiconductors and displays as they need several months to get manufactured. Apple, taking note of the rush and shortage, allocated much of their previously earmarked components for iPads and reallocated them to the iPhone 12 range instead.

One chip industry executive, taking note of these adjustments made by Apple, said it indicates the iPhone maker currently has enough processors to meet their production plan however are still chasing behind other much-needed components for the iPhones.

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After the pandemic disrupted the development of iPhone 12 and delayed the launch by a month, suppliers were initially worried about how the 5G iPhone 12 range would perform in the market and even Apple considered waiting until the next year to unveil the lineup.

But, nonetheless, the launch happened, and it got a very warm reception despite the fact that U.S and China consumers are currently having to face up to four weeks of wait times for some iPhone 12 pro models.

Jeff Pu who is an analyst with GF Securities believes that most suppliers and market watchers foresee a ‘rosy demand’ for 5G handsets in 2021 and therefore iPhone shipments will surely pick up the pace and return to growing by the next year. 

GF Securities forecast Apple to ship close to 220 million iPhones in 2021. But, when reached out to Apple for a comment on the same, they declined to revert back. We will keep you updated on all future developments. Until then, stay tuned.

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