Apple's Orders for iPhone 12 Components Complicated by Unclear Consumer Demand

Amid the ongoing pandemic in the United States and other countries, Apple is continuing to forge ahead with work on its upcoming iPhone 12 devices, which are expected to feature 5G connectivity, new 3D cameras, and other features.

fouriphones2020
With travel restrictions to China, Apple is experiencing difficulties preparing for its new devices and placing orders for components, according to The Wall Street Journal, and one factor Apple is dealing with includes predicting consumer demand.

Apple's new iPhones don't come out until December, but production and preparations begin months in advance. Former employees who spoke to The Wall Street Journal said that Apple's operations team places orders for camera module and other components in March and April, with orders based on how many iPhones Apple expects to sell in a given year.

The orders that are placed dictate how many devices Apple makes, and with the ongoing pandemic, consumer demand "has never been more unclear." Millions of people are out of work and others live in fear that their jobs might not be available in the future, which could lead to cutbacks in new ‌iPhone‌ purchases.

The question of consumer demand looms large for Apple Inc. as it prepares to unveil a new low-price iPhone model and soon must begin ordering components for its latest flagship smartphones, which usually are launched in the fall.

The fall iPhones, which this year were expected to garner significant consumer interest because of the use of 5G wireless technology, make up a sizable portion of Apple revenue.

Many companies are struggling to determine consumer demand due to the lockdowns across the world, which have left businesses with many unknowns about what the future holds. If Apple over-orders and is stuck with extra expensive 5G modems or unsold 5G iPhones, it could cut into the company's profit margins.

Susquehanna analyst Mehdi Hosseini told The ‌Wall Street Journal‌ that Apple is likely having component suppliers make ‌iPhone‌ parts as planned, and that it will reassess demand in May or June. This is in line with reports from ‌iPhone‌ suppliers like TSMC that have said Apple has not cut orders at this time.

As Apple prepares to launch new iPhones this fall, it is said to be "scrambling" to prevent product delays, and there have been mixed reports in recent weeks with conflicting information on whether or not the ‌iPhone‌ 12 will launch on time. As mentioned in earlier reports from Bloomberg and The Information, Apple's engineering team is conducting business using photographs and video calls for prototyping purposes. Apple has also allowed some engineers to take home prototypes of future products, which Apple has never previously allowed, all in an effort to continue work as usual.

Even if new 5G iPhones launch on time this fall, Apple could have a difficult time persuading customers to replace their old devices given the economic uncertainty. The low-cost ‌iPhone‌ that's in the works, which could be priced as low as $399, could be enticing, but it won't bring in as much money as Apple's much more expensive flagship devices. We'll likely learn more about Apple's plans and the current economic impact on the company's bottom line when it holds an earnings call later this month.

Related Forum: iPhone

Top Rated Comments

EugW Avatar
51 months ago
Apple's new iPhones don't come out until December, but production and preparations begin months in advance. Former employees who spoke to The Wall Street Journal said that Apple's operations team places orders for camera module and other components in March and April, with orders based on how many iPhones Apple expects to sell in a given year.
December?
Score: 10 Votes (Like | Disagree)
MacCurry Avatar
51 months ago
Demand will be known in an about a month. In the US COVID-19 mortalities are increasing to more than 1000 per day. Once NY+NJ slow down, then other hotspots will pick up like New Orleans, Detroit, South Florida, and others. By May 1st we could have over 35,000 dead. If that happens, unemployment will be nearly 1 in 3 people. Staying alive, healthy, and keeping a job will be the first priority.
Score: 10 Votes (Like | Disagree)
az431 Avatar
51 months ago

I'd have thought this was a bit obvious. A climate of fear isn't the best for making large purchases.
Was about to say the same thing. Guess it's a slow news day.


I'll save you from counting me. If this Covid-19 mess persists that long, count me as NOT upgrading for this year.
Apple comes on here every night to count potential future upgrades, so good thing you chimed in.


And this is why (among other reasons) I'm going to be buying the iPhone 9 either this month or next. Spending more than $500 on a phone right now (and in general) seems nuts. I work from home most days (minus coffee shops that are currently closed anyway) I always am sitting in front of my iMac or MacBook Pro. I'd rather buy a cheap iPhone with a great camera, and wait out this 4th version of the same design (that was never that great) while they figure out touch id through the screen and remove the notch (or at least slim it down).
You're in for a very long wait.
Score: 9 Votes (Like | Disagree)
bigcstyle4 Avatar
51 months ago
Even in normal times, they messed up by making the iPhone X essentially a perfect phone. I had every phone from the original and stopped at the X. None of the new features since then have been intriguing enough to increase my phone bill by $45/month for the next two years.
Score: 9 Votes (Like | Disagree)
Quu Avatar
51 months ago
I'm sure Apple will sell every phone they produce even if they have to store them for months. I mean they still sell the iPhone 8 guys. If the phone doesn't sell well and they still have stock in a year from its launch they could just sell them as the "old" iPhone like they do now with the iPhone 8.

And we shouldn't forget they're sitting on like 140 billion dollars I mean one bad year of overcommitting on production isn't going to even dent them.
Score: 7 Votes (Like | Disagree)
BlendedFrog Avatar
51 months ago
It's not just Apple. At this point, holiday shopping season is going to look very different. I highly doubt people are going to want an expensive phone this year when so many have been out of work for months on end.
Score: 6 Votes (Like | Disagree)

Popular Stories

Apple Logo Spotlight

Source: Apple to Announce New Products This Week

Sunday March 3, 2024 11:38 am PST by
Apple plans to announce new products with press releases on its website this week, a proven source familiar with the matter told MacRumors. While the products that Apple plans to announce have not been disclosed, there are rumors about new iPads, Macs, and accessories. It is unclear exactly what will be announced this week. Bloomberg's Mark Gurman today reiterated that Apple is planning new...
Apple Maps vs Google Maps Feature

Apple Maps vs. Google Maps: Which Is Better?

Friday March 1, 2024 7:10 am PST by
Apple Maps has been providing navigational guidance to Apple users for almost 13 and a half years now, and much has changed about the app in that time. However, according to data from Canalys, the overwhelming majority of iPhones in the U.S. still have Google Maps downloaded as an alternative to Apple Maps, which comes preinstalled on all iPhones. We want to hear from MacRumors readers. Which do...
apple tv plus banner

Apple TV+ Gains Over 50 Movies for a Limited Time

Friday March 1, 2024 6:29 am PST by
Apple TV+ today gained over 50 movies, adding to its back catalog of content for a limited time. The collection includes a large number of popular and classic titles. Subscribers can access the movies in a "Great Movies on Apple TV+" section in the Apple TV app. Some titles are also available in 3D. Movies in the collection include: 21 Jump Street 300 American Sniper Argo ...
iPad Air 12

Gurman: No Apple Event Planned for Upcoming iPads and Macs

Sunday March 3, 2024 5:09 am PST by
Apple does not plan to hold a traditional event to unveil new iPads and Macs, according to Bloomberg's Mark Gurman. Instead, he said Apple plans to announce the products on its website with a "series of online videos and marketing campaigns." If this plan is accurate, we can expect the new products to be announced with press releases on the Apple Newsroom website. Gurman expects Apple to...
airpods pro 2 pink

Apple Releases New Beta Firmware for AirPods Pro 2

Thursday February 29, 2024 11:41 am PST by
Apple today introduced a new beta firmware update for the AirPods Pro 2, both the USB-C and Lightning versions. The new firmware is version 6E188, up from the prior 6B34 firmware released in December. Apple does not often provide details or notes on what features might be included in the refreshed firmware, so it is unclear what's new. Note that this software is limited to developers at the...