Apple to ramp up iPhone production by up to 20%

on Jul 14, 2021
  • The 5G driven super cycle already resulted in stellar iPhone sales over the past few quarter.
  • Credit Suisse analysts expect 5G to continue to drive iPhone sales for the tech giant.
  • Shares of the company were reported about 2% up in premarket trading on Wednesday.

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Bloomberg said in a report on Wednesday that Apple Inc (NASDAQ: AAPL) will boost iPhone production by up to 20%. Shares of the company were close to 2% up in premarket trading.

The impact of 5G driven super cycle on iPhone sales

The announcement comes despite the 5G driven super cycle that resulted in stellar iPhone sales over the past few quarters.

From the time it launches a new iPhone to year-end, Apple traditionally produces roughly 75 million devices, as per Bloomberg. For its next-generation iPhones, it now wants suppliers to push production up to 90 million devices. The actual production number, however, is likely to fall shy of the target by a few million units.  

Apple spokesperson hasn’t made an official comment on the report yet. Earlier this week, a rumour emerged on Twitter that claimed Apple bought up to $2.5 billion worth of BTC. The $2.48 trillion company currently has a price to earnings ratio of 33.29.

Credit Suisse expects 5G to continue driving iPhone sales

In related news, Credit Suisse analysts said 5G will continue to convince customers of an iPhone upgrade in the future. In a note to investors on Wednesday, analysts predicted Apple will sell 234 million iPhones in 2021, 237 million next year, and 249 million in 2023.

In its fiscal second quarter, the American multinational generated $47.94 billion in revenue from iPhones, representing an annualised growth of 65.5%. Credit Suisse analysts said:

“We have seen good momentum in the iPhone 23 cycle with a richer mix along with unit growth off a lower base. We remain bullish on 5G as a catalyst for iPhone upgrades over time, but believe the momentum will likely slow from here with the focus shifting from early adopters skewing towards Pro models to mainstream penetration within Apple’s >1 billion iPhone user base as 5G coverage and use cases mature.”

Analysts also predict this year’s iPhone to come with evolutionary upgrades compared to the iPhone 12, including an improved camera, display, and processor.


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