Apple Cuts iPhone Orders By 20 Percent – Report

Apple has scaled back its planned production of the iPhone 12 portfolio in the first half of this year, it has been reported.

Citing sources familiar with the matter, Nikkei Asia reported that Apple is cutting its planned iPhone production by 20 percent compared to its output plans created in December.

And it seems that the iPhone 12 Mini is not selling as well as expected, with the planned production of the iPhone 12 Mini being reduced by 70 percent, which makes up the majority of the overall 20 percent cut.

Production cut

It should be noted that Apple no longer discloses how many iPhones it sells each quarter.

However in January analyst house IDC said that Apple had shipped 90.1 million devices during the fourth quarter of 2020.

It should be remembered that fourth quarter sales tend to be most popular due to the Christmas holiday period and the fact that the quarter comes after the release of the new iPhone models to the world.

Indeed, Apple usually releases new models in September, but this year the 5G iPhone 12 portfolio launch was delayed until October because of supply issues associated with the Coronavirus pandemic.

Want to know more about the history of the iPhone? Read our Tales in Tech History piece.

According to Nikkei Asia, Apple late last year, told suppliers to secure components and parts for up to 96 million handsets, including the entire iPhone 12 series – for the first six months of 2021.

That total also included older iPhone 11 and the iPhone SE models.

And at one point, Apple reportedly even told some suppliers that it needed components for more than 100 million iPhones for the first half of the year in a bid to secure components and production capacity amid global shortages.

But now Apple is targeting production of around 75 million units – slightly higher than iPhone shipments in the same period last year.

Reallocating components

Apple told suppliers that it still intends to build 230 million iPhones for 2021, an increase of more than 11 percent from last year, sources told Nikkei Asia.

“This year is still not bad, but of course demand for the first half of 2021 is not as high as people were thinking at the end of last year,” a person told Nikkei.

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 reportedly 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.

Poor demand?

Jeff Pu, a veteran smartphone analyst with GF Securities, told Nikkei that Apple had misjudged demand for both the iPhone 12 Pro and the iPhone 12 mini.

“Consumers won’t have that very strong feeling about the differences between core processors and about 5G wireless communication performance immediately, but they can immediately see the difference in screen size,” Pu was quoted as saying. “If it’s around the same price, many consumers would rather just pick the older iPhone 11, which has a larger screen, as they don’t yet expect much from 5G.”

And there was speculation that one of the problems for the iPhone 12 mini was its battery, at least according to an analyst at Isaiah Research, speaking to Nikkei Asia.

“The battery for the iPhone 12 mini is much smaller than the older iPhone 11, which is about the same price, and it’s smaller than the battery in the iPhone 12, which is only $100 more expensive,” the analyst reportedly said. “A 5G phone generally consumes more power, so consumers will be reluctant to buy a phone that, comparatively, does not have a good battery.”

There was no comment from Apple.