Apple has told suppliers who make components for its iPhone that customer demand is slowing more than it had anticipated, according to a report from Bloomberg News.
Citing “people familiar with the matter,” the news organisation said that Apple had told its suppliers not to expect a surge in demand early next year, and that it may not reach the kind of “blockbuster” sales targets originally envisioned.
Apple had already been forced to cut production on the iPhone 13, which was revealed in September, due to the global chip shortage.
It reportedly reduced the number of devices it planned to manufacture by 10 million, down from an original target of 90 million.
The chip shortage is expected to create a bottleneck for manufacturers lasting through at least 2022 and possibly beyond. As well as consumer technology, it has also impacted automakers like Toyota, which was forced to slash vehicle production by 40 per cent in September.
Even with supplies expected to improve for Apple early next year, Bloomberg’s sources do not expect this to translate into more sales. Anecdotally, the base version of iPhone 13 currently only has a few days’ lead time before delivery via its UK store.
There has been declining interest in annual smartphone upgrades for some time, especially for flagship models which have become more iterative in recent years without any major new features to draw in consumers.
Samsung has also seen a significant drop in sales for its S21 flagship device which was released in January this year.
Sales were reportedly 20 per cent lower than the year before, prompting Samsung to conduct an internal review of its mobile business.
The plight of Apple and Samsung’s flagship devices could be partly due to enhanced sales of mid-range devices since the start of pandemic that offer many of the features of their more expensive counterparts. With economies depressed in the wake of the Covid-19 pandemic, as well as a greater focus on home working and reduced mobility, it is not surprising this has had an impact on smartphone sales.