Apple has cut production of the iPhone 14after price increases for its non-US customers and rising inflation around the world led to weaker-than-expected demand.
The company has cut production targets by up to six million units, according to unnamed suppliers who spoke to Bloomberg.
Production of the iPhone 14 will total approximately 90 million handsets, keeping it in line with previous models. Apple had previously planned to ramp up production and forecast an increase in demand after the Covid pandemic led to two years of weak recording.
Instead, analysts say that rising inflation and the increasing risk of a recession are driving more consumers to hold onto older phones for longer rather than upgrade, in part due to higher prices for the latest iPhone models.
Apple has increased the price of its latest smartphone by an average of 16 percent in the UK and the EU. The latest iPhone 14 Pro, the flagship device, starts from £1,099 compared to £949 for the iPhone 13 ProApple’s premier high-end phone last year.
Paolo Pescatore of PP Foresight said: “In the future, people will be forced to make some difficult decisions regarding the need to buy a new connected device or service. Let’s not forget that consumer behavior patterns in recent have changed significantly over the years and will continue to do so.”
Apple did not respond to a request for comment.
The California tech giant has moved production of its iPhones and other devices out of China in recent years as part of its efforts to diversify its supply chains. Some Apple manufacturing facilities had to close during the pandemic due to local outbreaks.
Analysts at JP Morgan recently said that Apple is expected to move 5 percent of global iPhone 14 production to India by the end of 2022 and expand manufacturing capacity there to produce a quarter of all iPhones by 2025.
Vietnam is also in talks to produce Apple Watches and MacBook laptops, albeit under the control of China’s Foxconn, one of Apple’s main manufacturing partners.