Apple expects to sustain iPhone sales in 2022 as market slows.
By Debby Wu.
Apple Inc has asked suppliers to build at least as many of its next-generation iPhones this year as in 2021, counting on an affluent clientele and dwindling competition to weather a global electronics downturn.
The tech giant is telling its assemblers to make 90 million of its newest devices, on par with last year, despite deteriorating projections for the smartphone market, according to people with knowledge of the matter. The Cupertino, California-based company still expects to assemble roughly 220 million iPhones in total for 2022, also about level with last year, according to one of the people.
Apple's projections, a closely guarded secret, suggest it's confident about weathering a slump in spending on smartphones and other devices. Mobile device makers have begun freezing orders, China’s largest chipmaker warned on Friday. The global handset market, which slid 9% in the June quarter, is expected to shrink 3.5% in 2022, IDC has forecast.
Shares of Apple suppliers in Asia rose on the news. Taiwanese iPhone assembler Pegatron Corp jumped as much as 3.6% in its biggest gain in five weeks, while Japan Display Inc logged its biggest two-month rise of 5%. TDK Corp rose as much 5.3% and Murata Manufacturing Co gained 3.7%.
At a time when Android devices are suffering, the stronger demand for Apple’s new lineup stems from a customer base still willing to spend on premium gadgets, the people said. The virtual demise of Huawei Technologies Co also has eroded competition in high-end smartphones.
Hon Hai Precision Industry Co, which puts together most of the world’s iPhones, hinted at Apple’s resilience when it said this week that sales of its smart consumer electronics products should be little changed in 2022. A representative for Apple declined to comment.
The world’s most valuable company has promised to be disciplined about spending as economic and geopolitical uncertainty clouds the outlook for 2022 and beyond. Bloomberg reported last month that Apple would slow spending and hiring across some of its teams in 2023.
This week, a cooler-than-anticipated US inflation reading buoyed hopes that interest rate hikes won't be as aggressive as thought. But market observers cautioned the economic outlook remained bleak.