Demand for Apple iPhones is waning with the US Company facing a double-digit decline in demand for their new iPhone 14 compared to the iPhone 13 which consumers appear to be holding onto because there is little that new in Apple’s newest model.
Sales of the Companies latest smartphone series in the first three days of delivery came to 987,000 units, 11% lower than comparable sales of the iPhone 13 family last year, analysts including Edison Lee wrote in the note.
Also impacting global sales is the significant fall in demand for Apple products in China.
As a result, Apple has moved to immediately cut back on production.
Analysts claim that the “Initial data suggested iPhone 14’s sales may not be as strong as the pre-order levels indicated, since pre-order does not come with any payment obligations,” it said.
Smartphone shipments in China fell by almost a third to 19.1 million in July, national data showed earlier this month, adding to a year of dwindling sales in the world’s largest mobile market.
Apple’s effort to diversify its supply chain has seen the phone maker move to assemble iPhone 14 devices in India Vs China.
Yesterday Apple told suppliers to abandon preparations to boost assembly of the new line of products, Bloomberg is reporting.
Apple initially estimated that surging demand would necessitate an additional 6 million units on top of original plans for 90 million for the second half of this year.
Now Apple is cutting back on production numbers resulting in the Company’s stock falling close to 5% last night.
Economists say that fears of a global recession, soaring levels of inflation, and geopolitical unrest caused by the war in Ukraine is causing demand for products to shrink.
Market tracker IDC estimates that the smartphone market will contract by 6.5% this year to 1.27 billion units, according to Bloomberg.
“The supply constraints pulling down on the market since last year have eased and the industry has shifted to a demand-constrained market,” said IDC research director Nabila Popal.
“High inventory in channels and low demand with no signs of immediate recovery has OEMs [original equipment manufacturers] panicking and cutting their orders drastically for 2022.”
Talking to local retailers such as JB Hi Fi ChannelNews has been told that demand for Apples new iPhone 14 Pro model is holding up Vs demand for cheaper models.