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Apple wants to boost iPhone production by 20%

Apple wants to boost iPhone production by 20%

July 19, 2021: According to Bloomberg, Apple is asking suppliers to ramp up production of its next-generation iPhones by 20%. The stark increase from its 2020 production numbers comes despite last year being what the phone maker considered a “supercycle,” driven by new 5G models that offered consumers access to the improved, faster wireless networks provided by carriers.

On Wednesday, Apple shares were up more than 2%.

Apple has maintained a production level of nearly 75 million devices from the launch of the products to the end of the year, Bloomberg reported, citing people familiar with the matter. Now, the company reportedly is seeking nearly 90 million of its new iPhones. According to the report, the actual number produced could be a few million units shy of the target.

An Apple spokesperson wasn’t available to comment on the report.

On Wednesday, meanwhile, Credit Suisse analysts said in a note that 5G would keep driving upgrades as carriers expand their footprint of the faster and new networks worldwide. They added that there are more reasons for regular consumers than just early adopters to buy an iPhone with 5G.

Credit Suisse is expecting iPhone sales of 234 million units this year, 237 million units in the year 2022, and 249 million units in 2023. Apple ended reporting iPhone unit sales, but it reports $47.94 billion in iPhone revenue in its fiscal Q2 earnings, with 65.5% year by year.

“We have seen good momentum in the iPhone 12 cycle with a richer mix along with unit growth off a lower base,” Credit Suisse analysts said in the note.

“We remain bullish on 5G as a catalyst for iPhone upgrades over time, but believe the momentum will slow from here with the focus shifting from early adopters skewing towards Pro models to mainstream penetration within Apple’s >1 bn iPhone user base as 5G coverage and use cases mature,” analysts added.

According to the analysts, this year’s new iPhones would likely offer evolutionary upgrades over the 2020 model, such as improved displays, cameras, and processors, but that long-term changes to the iPhone, such as an eventual foldable design and a larger screen on an even more affordable 5G iPhone SE model will be continuing to drive new iPhone purchases.

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