- The impact of the coronavirus on global economies could force Apple to delay the release of the iPhone 12.
- Even though iPhone production is on the right track, Apple executives fear that demand for a new iPhone will be incredibly weak in September.
- As a result, some Apple suppliers are lowering their production targets for the components of the iPhone 12.
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The economic fallout from the coronavirus could force Apple to delay the release of the iPhone 12, Reuters reports. Although Apple’s supply chain is on the mend before the mass production of the iPhone 12 begins, Apple executives are concerned that demand for the device will be remarkably weak. And for good reason, the economy in the United States – and in many countries around the world – has indeed stopped because of the coronavirus. Millions of people have been stranded in their homes for weeks, unemployment is at an all time high and non-essential businesses will remain closed for the foreseeable future.
Consumers, in turn, now have much lower disposable income than a month ago. In addition, there is no indication that the impact of the coronavirus will soon disappear. A recent report suggests that New York City, for example, may still have weeks to reach a peak in coronavirus cases. Therefore, it is very likely that the iPhone 12 can hit store shelves at a time when most of the world is concerned with much more pressing issues.
“No one is talking about manpower or hardware shortage (in China),” said someone involved in the Apple supply chain. Reuters. “Now everyone is trying to find out if demand from the United States and Europe could follow. The focus is now on consumer demand in the United States and Europe. “
This report corresponds to a previous story claiming that Apple executives fear that the response to the iPhone 12 – even if production goes as planned – is at best lukewarm.
Aside from the request, it is also possible that the coronavirus lockout could hamper Apple’s efforts to fully perform the required engineering tests.
A recent report by Nikkei Explain:
The technical development of the iPhone 5G has also been affected by travel restrictions introduced in the United States, China and elsewhere to fight the coronavirus, said two people familiar with the Apple calendar. The company was supposed to work with suppliers to develop a more concrete prototype for the new phones from early March, but it had to delay such a close collaboration, which requires practical testing, until the end of the month, before postpone it again due to the worsening pandemic in the United States, they said.
As a result, we’ve seen a few reports that Apple may delay the release of the iPhone 12 in November.
In the meantime, some of Apple’s major suppliers plan to lower production targets for iPhone 12 components in anticipation of a sharp drop in demand.
One of Apple’s major display providers is preparing for a similar level of contraction, according to a person familiar with the subject. The company had planned to send 70 million iPhone screens this year, but is now planning to cut that target by more than 17% to 58 million units.
The overall picture remains fluid, as it is unclear how long the coronavirus will keep world economies stalled. Nevertheless, Apple will finally reach a point where it will simply have to make an executive decision on when to release the iPhone 12. With the initial launch window scheduled for September, and with mass production that is not expected to start for some time , Apple has a few weeks to assess the situation and play things by ear. But once arrived in mid-May, a decision will have to be made one way or the other.
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