Apple cut production of its iPhone 12 Mini in the first half of this year, the source said

0
79

Tencent is cutting production plans for the iPhone 12 Mini in the first half of this year as part of a broader adjustment to Apple’s production plan at the end of last year, people familiar with the matter said on Wednesday.
It is reported that compared with the plan in December last year, Apple will reduce orders for all iPhones by about 20%, most of which come from Apple’s cheapest 5g mobile phone, the iPhone 12 Mini. Apple told suppliers at the end of last year that it would ensure 96 million mobile phone parts in the first half of 2021. The plan includes not only the iPhone 12 series, which went on sale at the end of last year, but also the iPhone 11 series and the iPhone se. At one point, apple even told some suppliers that it needed more than 100 million iPhone parts in the first half of this year to ensure the components and capacity in case of global shortage.
According to the latest news, Apple’s current target production is about 75 million units, slightly higher than iPhone shipments in the same period last year. Apple told suppliers it still plans to produce 230 million iPhones in 2021, up more than 11% from last year, people familiar with the matter said.
According to various sources, the most affected parts are the 5.4-inch iPhone 12 mini, which retails at about $699. It is reported that some suppliers have even been asked to temporarily stop producing parts for the iPhone 12 Mini. The mildest estimate is that Apple will cut its planned iPhone 12 Mini production by more than 70% in the first half of the year. “This year is still good, but the demand in the first half of 2021 is certainly not as high as people thought at the end of last year,” another person familiar with the matter said.
Multiple sources also said that the production adjustment of iPhone 12, iPhone 12 pro and iPhone 12 Pro Max is relatively mild, and the market demand for these models is still relatively healthy. “Some parts of the iPhone 12 Mini have been reassigned to the iPhone 12 pro and the iPhone 12 Pro max,” said one person directly familiar with the matter.
The source added that the cut also reflected Apple’s adjustment to its previous practice of actively ordering parts. At that time, manufacturers of smartphones, personal computers, servers, and automobiles were preparing to compete for Limited supplies of chips, printed circuit boards, displays, and other resources. Jeff Pu, a senior smartphone industry analyst at GF Securities, said Apple had made a wrong judgment on the demand for both the iPhone 12 pro and the iPhone 12 Mini. “Consumers don’t immediately have a very strong sense of the difference between the core processor and 5g wireless communication performance, but they can immediately see the difference in screen size. If the price is about the same, many consumers would prefer the iPhone 11 with a bigger screen because they don’t have much expectations for 5g, “he said.
Another problem with the iPhone 12 Mini is battery life, according to Isaiah research analysts. “The battery capacity of the iPhone 12 Mini is much smaller than that of the iPhone 11, but the price is about the same, and it’s smaller than that of the iPhone 12, which costs only $100. 5g phones usually consume more power, so consumers are relatively reluctant to buy phones with small battery capacity, “the analyst said.
At the end of last year, the quota for the iPhone 12 Mini was between 10% and 15% of the iPhone 12 series devices Apple ordered, people familiar with the matter said. The change of iPhone production plan has brought significant challenges to Apple suppliers, who will be forced to quickly adjust production utilization and labor resources. The problems faced by those suppliers who mainly provide parts for iPhone 12 Mini will be particularly prominent.
At the same time, apple itself still has a healthy demand for its high-end models. In addition, demand for the iPhone 11, which will be launched in autumn 2019, remains strong in emerging markets such as India. Apple shipped 74.3 million iPhones in the first half of last year, according to IDC, a market research firm. The revised production plan is about 75 million units, still slightly higher than last year, but the plan may change due to market dynamics.
Apple still maintains its annual target of producing about 230 million iPhones, which is 11.6% higher than last year. This is to maintain flexibility in the face of any shortage of spare parts and to cope with further economic recovery in the second half of 2021, according to people familiar with the matter. Apple sold 206 million iPhones last year, with 90.1 million of them sold between October and December, according to IDC. Although the global smartphone market shrank by 5.9%, iPhone shipments grew by 7.9% in 2020.
Meanwhile, Apple has rescheduled plans to start mass production of two new MacBook laptops in the second half of this year, instead of the previous may or June. The two macbooks will use Apple’s own processors as part of a two-year transition away from long-term supplier Intel processors.
People familiar with the matter said that although Apple adjusted its iPhone production plan, the global shortage of chips and parts last year weakened its bargaining power. It has been reported that Apple has allowed companies with particularly tight supply to keep pricing levels, rather than asking for large quarterly discounts, as in the past few years. So far, Apple has not commented on the report. (compiled by Tencent technology / Wuji)