China’s Factories Are Open – Now Apple Has iPhone Demand Worries

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Apple’s factories in China are operating again, as the country begins its recovery from the coronavirus outbreak. However, questions still remain about the potential demand for both the iPhone 11 series and the 5G device that had been expected to arrive later this year.

iPhone 11

Potential Drop in iPhone Demand Hits Supply Chain

Suppliers believe that they would be able to manufacture enough devices. However, they worry about reduced demand in the wake of the pandemic. Work on a 5G iPhone has reportedly been postponed, a senior official at one of the key assemblers told Reuters. However, that does not mean for certain that the devices will not arrive as expected in the fall.

No one is talking about manpower or material shortage anymore. Now everyone is looking at whether demand from U.S. and Europe could keep up. The focus now is the demand from consumers in the U.S. and Europe.

Furthermore, a key display provider is also understood to face similar issues. It previously anticipated providing 70 million screens for iPhones in 2002. However, that target has fallen to 58 million units – a 17 percent reduction. This would lead to job losses in the supply chain in Vietnam. The supply chain in Malaysia could also face issues. A supplier there said:

Now everyone is looking at whether demand from the U.S. and Europe could keep up,” said the person, who has direct knowledge of the matter. “The focus now is the demand from consumers in the U.S. and Europe.

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geoduck

OTOH, the 5G network is slow to roll out. Customers I suspect are going to take a wait and see attitude unless they live in New York, LA, Chicago, or some other 5G saturated area. For most users in most areas 5G is really not an issue yet and won’t be for a few years. There has always been a question as to whether the first gen 5G iPhone would sell well. (A higher price for no benefit because the network in most areas doesn’t support it yet). Covid-19 gives Apple the perfect excuse if sales aren’t up to the… Read more »