Apple Asks Suppliers To Produce 72-78 Million iPhone7s This Year, A 2-Year High

Barron's Asia ^ | May 23, 2016, 3:26 A.M. ET | By Shuli Ren

[Swordmaker]

Taiwan’s Apple (AAPL) supply chain manufacturers soared, with the TAIEX Index closing 2.6% higher after media reports that Apple is asking its suppliers to prepare for much higher-than-expected iPhone 7 production for 2016.

Taiwan’s Economic Daily said Apple had asked its suppliers to produce 72 to 78 million new iPhones by the end of the year, the highest production target in about two years. The street had expected only 65 million iPhone 7s to be produced this year.

According to the Taiwan newspaper, Hon Hai Precision Technology (2317.Taiwan) will remain the key assembler for iPhone 7 and Pegatron Corp. (4938.Taiwan) will be involved in the assembly process too. Both companies will get more market share this year, as they participate in dual camera, glass casing components production in addition to being assemblers.

Pegatron soared 10% today, Catcher Technology (2474.Taiwan) jumped 9.9%, Hon Hai Precision gained 4.7%, Taiwan Semiconductor Manufacturing Corp. (2330.Taiwan/TSM) rose 3.8%, Largan Precision (3008.Taiwan) was up 2.6%. Year-to-date, the iShares MSCI Taiwan ETF (EWT) has dropped 1%.

[Swordmaker]

Reports from Apple's Asian suppliers say that Apple has Asked Suppliers To Produce 72-78 Million iPhone7s This Year, A 2-Year High. — PING!

Apple iPhone7 Production Projection
Ping!

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[Swordmaker]

Thanks for the head’s up. . .

[arl295]

Maybe Trump can use them as bricks in the new wall?

Can’t think of a better use for them

[bgill]

No one in this household will buy anything from Apple.

[dhs12345]

Not in the market but knock 30% off the price and I might consider buying one.

[SamAdams76]

We have almost nothing but Apple devices in this household.

[Shanghai Dan]

Apple scales back orders for it's iPhones.

I work in the CE industry. It's pretty widely known that Apple usually pads their initial estimates pretty heavily, but includes wicked bad penalties if a supplier CANNOT meet the padded demand. If demand actually meets their estimates (which it almost never does), then Apple is covered.

BUT, when demand is short of estimates (which is the most common case), Apple uses the surplus manufacturing capacity the factory has to beat them down on price. They make them over-commit on production capacity, then force price-downs when the initial order estimates are low and production capacity is at only 70% or so.

Win/win for Apple!

[Mark17]

We have almost nothing but Apple devices in this household.

We DO have nothing but Apple devices in this household. 😃😆😄

[AnotherUnixGeek]

Taiwan’s Economic Daily said Apple had asked its suppliers to produce 72 to 78 million new iPhones by the end of the year, the highest production target in about two years.

No kidding? From what I've been reading, the iPhone 7 will not be a revolutionary iteration - the rumors say it'll have some minor enhancements and new features. Apple must be projecting some major new market for sales, or else they're over-estimating demand for a phone that will be very similar to the 6s.

[gigster]

Fire-up the assembly-line in north Korea.

[Mr. M.J.B.]

Great. Solid info.

I believe that product reached its plateau. Saturation levels in some markets too.

One trick I’ve seen them do in the past is release a major iOS upgrade that wrecks performance or some critical aspect of the previously fine hardware. Like Win10 upgrade nagware, many people just give up after a while and get what’s new. Planned obsolescence, meet planned annoyance.

The rule here is never upgrade the iOS after Apple releases new hardware.

[crosdaddy]

LOL, I’m not upgrading my iOS , I’m still rocking the 3G.

[arl295]

Exactly

I don’t support Anti-American liberal companies

Apple, Target, NBC, Facebook are all dead to me

[gigster]

72-78 million phones/year, how many phones is that per day, you Mathemagicians out there?

[Swordmaker]

72-78 million phones/year, how many phones is that per day, you Mathemagicians out there?

That's not per year. That's just for the last calendar quarter of 2016, the first quarter the iPhone 7 will be on sale. Apple sold about 230 million iPhones in 2015.

[Swordmaker]

Not in the market but knock 30% off the price and I might consider buying one.

iPhone 6s — $649.

At 30% discount would sell for $454.30

An iPhone SE with the same speed and functions is now selling for $399. That's a 38% discount.

[Swordmaker]

I work in the CE industry. It's pretty widely known that Apple usually pads their initial estimates pretty heavily, but includes wicked bad penalties if a supplier CANNOT meet the padded demand. If demand actually meets their estimates (which it almost never does), then Apple is covered.

BUT, when demand is short of estimates (which is the most common case), Apple uses the surplus manufacturing capacity the factory has to beat them down on price. They make them over-commit on production capacity, then force price-downs when the initial order estimates are low and production capacity is at only 70% or so.

Uh, no, they do not. You're spouting BS. If what you claim were true, no contractor would do business with Apple. Apple is well known for their just in time inventory control. Apple does not pad their orders. Apple pays for the equipment for the contractors' assembly lines and specialized manufacturing for their lines.

[Swordmaker]

Apple Scales Back Orders for its iPhones

Your link was from JANUARY and was totally expected quarterly reduction from the previous holiday quarter and in anticipation of the NEW iPhone SE release, which Apple still cannot meet orders on. Apple's FIRST CALANDAR 2016 was lower than the highly unusual 2015 quarter which saw the upgrading due to the previous quarter's release of the first large screen iPhone 6.

[jdsteel]

I am hoping for sapphire glass on the phone!!!