Apple Delays Production Ramp-Up For New iPhones

Apple is still planning to launch new iPhone versions in mid-September but is curtailing the usual summer ramp-up in production by 20 percent, The Wall Street Journal reported on Monday (April 27), citing sources familiar with the decision.

Usually, Apple steps up production in the summer to build inventory in anticipation of brisk sales in the fall. In the wake of the coronavirus pandemic, mass production this year will be delayed by about a month due to weakened demand worldwide and supply chain issues in Asia, the sources said.

Four new iPhone versions are being released, some equipped with 5G, sources said. There will be three sizes — 5.4, 6.1 and 6.7 inches — with light-emitting diode screens, or OLED, according to the sources. 

China’s Foxconn Technology Group, which assembles iPhones, recently stopped hiring new workers at its central plant in Zhengzhou, sources connected to Foxconn’s recruitment efforts said.

Toni Sacconaghi, an analyst at Bernstein, recently said in a report that a delay isn’t troublesome for investors unless Apple misses this year’s holiday shopping season. Investors and analysts expected delays after Apple said it was going to miss revenue projections. iPhone sales account for upwards of 50 percent of Apple’s total revenue. Its quarterly earnings report is set for Thursday (April 30).

Apple has been hard hit by the coronavirus pandemic, having stores and manufacturers close in China and halting operations in the U.S. and in Europe. The worldwide economic downturn has also made demand for new iPhones hard to predict. The Silicon Valley tech giant relies on the U.S. and Europe for two-thirds of total sales. 

Because engineers couldn’t travel to China factories, they relied on video conferencing to help Chinese colleagues assemble iPhone prototypes, according to sources familiar with the matter.

Apple started taking orders on April 17 for its new, smaller, $399 iPhone in a move to reach budget-conscious customers. The starting price is $50 below the iPhone 8, which is being discontinued. The new phones will have a 4.7-inch display and the same processor chip as the 11 Pro.