Even though the use of devices like smartphones, laptops, and desktops has skyrocketed, the aftermath has seen the worst decline in the smartphone market since the start of the pandemic. While there have been some, like Apple, which posted strong quarterly numbers, there have also been others, like Chinese smartphone manufacturer Xiaomi, that did not perform so well.
Xiaomi, in fact, saw its first-ever decline in quarterly revenue.
It was the iPhone (along with Mac) that spearheaded Apple’s strong performance in the fiscal 2022 second quarter – the Cupertino-headquartered tech giant pocketed over $97 billion in revenue during that period. We are a few months down the line, and now we learn that the production of iPhones this year will be more or less the same as last year.
Bloomberg reports that Apple plans to keep the production of iPhones to around 220 million, and has communicated the same to its suppliers. This number falls short of analyst predictions that the tech giant would be rolling out around 20 million more iPhone devices this year.
This begs the question, why is Apple planning to keep its iPhone production flat this year? A number of factors are the reasons, and it seems that global inflation is not the only culprit. One of the major reasons why the smartphone market had such a rocky start and Apple made this decision is the ongoing Russian invasion of Ukraine.
As it continues to persist and drive up the prices of oil and food, the appetite for gadgetry falls.
Other reasons include the volatile exchange rate and the curbs and city-wide lockdown in China because of COVID-19. The latter has hampered the work of Apple’s factories there. Other factors include interruptions in the global supply chain (which has been going on for quite some time) and a gradual fall in the demand for smartphones.
According to Apple, the current quarter will have new obstacles in supply and demand as well due to new lockdowns in China and Taiwan. This is not exactly what customers are looking to hear from the tech giant at this time, given that the iPhone 14 is waiting at the curtains to make its big reveal in the near future.