Apple cuts back on iPhone production amid dwindling demand

Apple has informed its suppliers about cutting back the assembly of as many as 6 million iPhone 14 variants in the year’s second half. This will take the production figure to about 90 million – similar to last year and aligning with the forecasts put out by the company earlier this year.

The report also added that an Apple supplier is mulling a move to shift production to only premium iPhones as it has been observed that higher-priced iPhone 14 Pro models have a higher demand than other entry-level iPhones.

Earlier this year, Apple’s Chief Financial Officer Luca Maestri had warned that the war in Ukraine, which led Apple to stop sales in Russia, would cut sales more deeply in the fiscal third quarter.

He told analysts on the call that supply-chain issues would hurt sales in the quarter by $4 billion to $8 billion, “substantially larger” than the hit in the second quarter.

Chief Executive Officer Tim Cook said that almost all of the Chinese factories doing final assembly of Apple products had restarted after recent Covid-19 shutdowns, but the company is not forecasting when the chips shortage, mostly affecting older products, would end.

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The cut back in manufacturing of iPhones has been a recurring issue for Apple, with the Cupertino-based tech firm slashing production output last year as well. It had reduced production by as many as 10 million units as prolonged chip shortages hit its flagship product.