Apple is delaying the production of its new 2020 iPhone models due to a slump in demand, according to a report by the Wall Street Journal.
Production of the new models will be pushed back by approximately one month, as fewer people are purchasing gadgets such as high-end smartphones due to the global coronavirus outbreak. This will affect the four upcoming iPhone models which were anticipated to be launched this fall as part of the 2020 iPhone 12 line, coming in 5.4-inch, 6.7-inch, and 6.1-inch sizes and offering 5G connectivity.
This delay is not entirely unexpected, as this time last month Apple contractor assemblers were already speculating that there would be decreased demand for high-end smartphones, especially in the U.S. and Europe.
In addition, even though the outbreak of COVID-19 has been brought somewhat under control in China, at least enough for many factories there to reopen, there remain concerns about global supply chain issues.
Regarding the production delay, a source told the WSJ that Apple intends to reduce the number of handsets it produces this year by up to 20%, although the company may possibly make up for this drop by producing more handsets next year.
Apple was hit hard by the coronavirus pandemic early on, as much of its manufacturing takes place in China. It announced that it was unlikely to meet its second-quarter revenue forecast and had to close its retail stores, first in China and then around the rest of the world.
But Tim Cook, Apple CEO, said at the time that he was confident Apple could weather the storm of factory and retail closures: “It will take some time, but by and large I think this is a temporary condition, not a long term kind of thing. You know, Apple is fundamentally strong, so that’s how I see it.”
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