Apple Accused Of Overestimating iPhone 12 Sales Ahead Of Launch

Sources reveal that Apple could be ordering way more iPhones than it will actually be able to sell this year. This is due to the fact that COVID-19 is seen to negatively affect the demand for Cupertino's new devices.

Apple told its suppliers of its plans to make 213 million iPhone units in the next 12 months until March 2021, the Nikkei Asian Review reported. This number is 4% higher the number of iPhones it ordered during the same period a year ago. Suppliers, however, don't believe Cupertino could actually sell all of these devices during this time.

“Apple's production outlook is pretty bullish, and we will need to assess whether it is based on a realistic demand [forecast],” an executive at a components maker told Nikkei. “Actual production could be 10% to 20% lower,” the executive added.

Nikkei's sources revealed that the 213 million units that Apple ordered will be split 50-50 between existing and upcoming devices. These include the newly launched 2020 iPhone SE and the upcoming iPhone 12 series, believed to have four distinct models.

Analyst Ming-Chi Kuo said in a recent investor note that although Apple is experiencing “better than expected” 2020 iPhone SE sales at the moment, the overall demand for its products in the quarter ending in June could still be about 20% to 25% lower compared to the previous year, CNBC reported. This, Kuo said, is caused by the COVID-19 pandemic.

The analyst added that the public's response to the iPhone SE could very well indicate that consumers are moving towards lower-priced phones. This, in turn, has implications for Apple, particularly its higher-priced iPhone segment. It will also affect the suppliers providing parts for these devices.

Wrong estimates?

Was Apple wrong in making estimates with regards to iPhone sales this year? Apple was forced to shut its stores due to the spread of COVID-19 both inside and outside China. As of now, most of the company's sales are done via online transactions. This situation, the Nikkei Asian Review said, “have made it hard for Apple to gauge demand for its products.”

Nevertheless, parts makers believe Apple's move might simply be a preparation for possible future sales. “Apple may want to adjust inventories so that they have sufficient stocks in the fall and on Christmas,” a person involved in the iPhone production told Nikkei.