Apple is cutting back production of iPhone 14 Plus and is increasing the output of the more expensive iPhone 14 Pro due to lukewarm demand for the mid-range model, market research firm TrendForce said.
The share of more expensive iPhone 14 Pro models has increased to 60 percent of the total output from the initially planned 50 percent, and it could rise to 65 percent in the future, TrendForce said in its report said.
Apple’s focus on high-end models may help it counter the softness in smartphone sales. In the thick of the chip crisis, Apple’s Pro and Pro Max premium tier of devices, which have been strong sellers, helped the company push margins higher.
The TrendForce report said that rising U.S. interest rates could crimp consumer spending, undermining the demand for iPhones in the first quarter of 2023. This could lead to a 14 percent year-on-year drop in production to 52 million units.
At present, the overall proportion of new iPhone models in Apple’s shipments will remain at 36 percent and the company’s 2022 iPhone shipment target is 240 million units, an annual increase of 2.8 percent.
Analysts have in the past said iPhone 14’s Pro and Pro Max versions were selling at a brisk pace, though demand for the base model, typically Apple’s best seller, has been underwhelming.
Apple was the only vendor in the top five to register a growth in shipments during the third quarter of 2022, improving its share of the global smartphone market to 18 percent from 15 percent a year ago, according to research firm Canalys. The increase in share came as the overall smartphone market shrank 9 percent, Canalys said.
Last month, Apple said it would manufacture its latest iPhone 14 in India, as the tech giant moves some of its production away from China to hedge risks arising from the growing tensions between Washington and Beijing.
TrendForce estimates the share of Apple’s output from India to exceed 5 percent in 2023 and increase over the years.