Apple's taking a conservative approach to 2019 iPhone production orders

Apple's taking a conservative approach to 2019 iPhone production orders

The iPhone 11 series is just one week away and analysts from Cowen and Rosenblatt Securities believe Apple is adopting a pretty conservative approach this year when it comes to orders.

Apple aims to better handle excess stock in 2020


Based on investor notes seen by AppleInsider, the overall number of units ordered this year from Apple’s assembly partners isn’t thought to be much higher than what was requested twelve months earlier. Specifically, Cowen’s source suggests Apple is planning to manufacture a total of 65 million units for the fourth quarter of 2019 which is considered “flat” year-over-year. This figure consists of 47 million iPhone 11 units and 18 million combined units of older models such as the iPhone XS and iPhone 8.

Looking at the entire second half of 2019 in terms of manufacturing volume, it’s believed Apple has ordered 79 million iPhone 11 units which is actually down 7% from the 85 million iPhone XS & XR units it ordered last year. Cowen believes the lower production rate is an attempt to better handle excess inventories as Apple heads into 2020. 

From what can be gathered, Apple’s biggest focus right now in terms of production seems to be successfully serving the North American market before mid-December when tariffs on Chinese imports are set to be applied. According to Rosenblatt, the California-based company is yet to make any changes to iPhone 11 Pro and iPhone 11 Pro Max manufacturing levels because it’s “already been aggressive enough to build inventory for the North American market.” However, Apple reportedly sped up production for the iPhone 11 (R) in August because of anticipated higher sales.

Once December passes both new and old iPhone models imported from China will automatically be subject to the new 15% import tariff. The impact of this should be split between Apple and its supply chain partners although the “rapid depreciation” of China’s currency that’s gradually lowering manufacturing costs should help offset the added cost for Apple slightly. Nevertheless, it’s still expected to impact the company’s bottom line and may result in weaker Chinese iPhone sales as local customers retaliate.

Consumers in the US aren’t presently expected to see any price increases but the threat certainly exists. This could lead to a sudden spike in demand by consumers attempting to avoid the tariffs which may result in a “stronger than seasonally normal” quarter for Apple, according to Rosenblatt.

iPhone 11 series announcement, release date, pricing


The iPhone 11 (R), iPhone 11 Pro, and iPhone 11 Pro Max or whatever Apple chooses to call them will all be announced next Tuesday, September 10. Last year Apple opted for a staggered release wherein the iPhone XS Max series arrived in September and the cheaper iPhone XR followed in October but this year all smartphones are expected to launch simultaneously on Friday, September 20. To ensure an early delivery, Apple should open up pre-orders a week earlier on Friday, September 13.

When it comes to pricing the 2019 iPhone lineup is rumored to be no different to last year’s. The cheaper iPhone 11 will apparently stick to the $749 price tag while the premium iPhone 11 Pro looks set to land at $999. The iPhone XS Max’s replacement, on the other hand, should retail at $1,099. The standard models should feature 128GB of storage although 256GB and 512GB variants that retail at higher prices are to be expected too.

Finally, in regards to colors, the iPhone 11 will reportedly be sold in black, white, red, yellow, green, and lavender. The iPhone 11 Pro and Pro Max, on the other hand, may launch in Gold, Space Gray, Silver, and a new dark green shade.

FEATURED VIDEO

14 Comments

1. Derekjeter

Posts: 1515; Member since: Oct 27, 2011

The iPhone has not sold out in the last 3 years like it would before. I remember last year walking in to upgrade my wife’s line at 7pm on launch day and they still had XS Max which was the phone everyone wanted. This year sales will be lower than last year.

7. sgodsell

Posts: 7431; Member since: Mar 16, 2013

Everyone and their uncle hasn't believed Apple for years about it will take months for production to catch up, or their was lineups. Apple cried wolf too many times, and now people don't believe what Apple reports. Some of the best fake news will always be Apple related. "Apple aims to better handle excess stock in 2020" Of course Apple will handle excessive stock by helping others, and carriers with BOGO deals, or buy one and get a $200 to $400 instant cash back with gift cards or Visas. This is Apple's new way of handling their excessive stock. That alone should tell everyone how overpriced iPhones truly are.

11. oldskool50 unregistered

Apple has nothing to do with carrier deals. Carriers buy their phones. They have to sell them the best way they can. The phones are covered by the data plan. That is why you are forced to have it. The only difference is the carriers don't subsidize any cost anymore. Carries are Apple biggest customers. I don't know the deal or what happens to unsold product. If carriers start ordering l was product because they can't sell it, and same for retailers, you gonna see more loss sales. $1000 for any phone is pure greed, but Samsung dows offer alternative models. Apple has priced themselves into a corner and to lower the cost now would make them look completely stupid. I just wanna know what the fans are gonna be saying when iPhone sales fall below 100M in to years.

2. sirohunter

Posts: 204; Member since: Sep 23, 2017

I'm gonna preorder mine once preorders start, but I feel like Apple is purposely puts that it's sold out to attract more buyers.

12. oldskool50 unregistered

Dude. Over 1.2B people have an iPhone. You can only make so much product at a time. Demand usually exceeds production. It's just now the demand is no longer higher anymore. I can't remember a time I wanted to buy an iPhone and not be able to just walk into my carriers an get one. Standing in line was always stupid. Now, even that is gonna die. We already saw starting with the 7, things started to die down, when you consider for the 7 and 8, production was lowered even after weeks on sale. This is why Apple isn't announcing sales. It's totally embarrassing and this is exactly what the frikkin crooks deserve.

3. TBomb

Posts: 1563; Member since: Dec 28, 2012

slightly unrelated, but pretty sure the XR has thicker side bezels than the 8 in that pic..

5. OneLove123

Posts: 1174; Member since: Aug 28, 2018

I have both and it is thicker. It's like they went backwards with the xr screen. Lower resolution and thicker side bezels. They need to fix it for the next iPhone r.

4. TBomb

Posts: 1563; Member since: Dec 28, 2012

More related than my previous comment: This might just be me, but the numbers are kinda confusing. @JSwing, can you clarify if when you report on quarters and years, if you are on Apple's quarters or our calendar quarters? As of right now, I find it interesting that production is down despite the tariffs taking effect in December. I'd imagine that they'd front load the production to get them shipped pre-tariff. But the costs of storage must be more expensive than the tariff.

6. darkkjedii

Posts: 31286; Member since: Feb 05, 2011

The 6/Plus was the last sell out, as far as I can remember. These will be available for walk in purchase on launch day, just like the XS/Max was. Apple has lost that magic touch, and is just making another really good device now. iPhones are up there with the rest...nothing more.

8. gadgetpower

Posts: 280; Member since: Aug 23, 2019

All I want an iphone pro this Fall

9. Wazupmrg

Posts: 186; Member since: Apr 10, 2017

Conversative is a nice way of saying less people want it. Just call it as it is instead of sugar coating everything

13. oldskool50 unregistered

If this was Samsung they wouldn't be sugar-coating it.

10. oldskool50 unregistered

Conservative? No. They simply know they have priced the iPhone out of reach and sales are gonna continue to drop...forever. Unless they drop the price or release lower costing models, they are done. Samsung at least has lower costing models so they will be fine. APPLE is never recover without dropping the price. They are done and they know and Cook is gonna. W in th2 unemployment line within 2 years. Smart people like Ivy jumped shipped before it sank. Guess he's smarter than he looks. The test of the Apple'McDouchebags are just gonna ride the titanic to the bottom

17. Erik397

Posts: 1; Member since: Sep 05, 2019

Very informative content. Boost Mobile of Red Ford

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.