Apple reacts to Huawei ban by barely increasing iPhone production

Apple reacts to Huawei ban by barely increasing iPhone production
Research company Cowen has made it an obsession to follow various stats related to Apple's iPhone business (and thus keep track of its health status), and one of those stats seems to be "number of iPhones produced" on quarterly basis.

The firm, cited by AppleInsider, now reports that Apple has been ordering a slight increase in iPhone production during the quarter that is about to end in a few days (Q2 2019), and according to the analysts, the reason for that is the US ban placed on trade with Huawei.

It all makes sense – a competitor is banned, so naturally its portion of the market is going to be left unserved and looking for an alternative solution, right?

It sounds like a great deal for Apple, but reality is a little different. Cupertino has reportedly increased its iPhone production during Q2 to the tune of just 2.5%: from 39 million expected units to 40 million. Why is that?

The market analysts at Apple have surely crunched all the numbers and determined what the maximum possible market opportunity is going to be for Apple, in light of the Huawei ban. iPhones are incredibly popular all over the world, but Apple's strongest position is, understandably, in the US, where Huawei smartphones are next to nonexistent anyway.

Huawei's major markets are across Europe and Asia, but while the Chinese company has been making noise with its top-shelf products like the P30 Pro, the reality is the bulk of Huawei sales consists of lower and mid-range handsets, which is not exactly Apple territory. Add to that the fact that distressed Huawei customers would be more likely to choose a fellow Android manufacturer as a replacement (like Samsung or Xiaomi, for example), and it becomes clear why Apple is seeing such a minor opportunity for production increase.

It is estimated that the current range of iPhones — the XR, XS, and XS Max — constitute around 30 million of the 40 million iPhones produced in Q2. The rest are divided between the more affordable iPhone 8 and iPhone 7 lines, which are still officially on sale, serving as Apple's mid- and entry-level options.

Apple has been experiencing a decline in year-over-year iPhone sales for a while now, and there is no reason to believe that this trend is about to change in the near term. In fact, Cowen analysts believe that there may still be certain risks for Apple's business, due to the ongoing trade face-off between the US and China. The possibilities of a counter-ban or additional tariffs imposed on Apple goods manufactured in China currently seem unlikely, but are nonetheless lingering in the air.

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19 Comments

1. S4NDY

Posts: 225; Member since: Mar 14, 2016

Apple thinking Huawei users ,who are angry with the United States would switch to an US phone

4. Dr.Phil

Posts: 2314; Member since: Feb 14, 2011

It’s an increase of 1 million units. That’s hardly Apple thinking they are going to convert everyone with a Huawei phone. As the article states, it’s mostly for those in the US and parts of Europe. I’m curious if you even read past the title.

5. jacky899

Posts: 427; Member since: May 16, 2017

Huawei, Android phones, was never a threat to Apple, IOS phone. Users tend to stick their familiar OS instead of learning a new one and having to rebuy apps. Apple is still considered the most premium, most sought after brand in China. In fact Apple has profitted from China alone all these years more than all Chinese phones profitted from the world.

8. sgodsell

Posts: 7028; Member since: Mar 16, 2013

Yet, Apple sales continue to plummet in China, with no end in site.

9. iloveapps

Posts: 715; Member since: Mar 21, 2019

Yet, Samsung sales continue to plummet in China, with no end in site. They belong to others in market share and that’s so sad because Samtard thinks its the best and innovative and yet cannot sell as much as iphones.

11. oldskool50

Posts: 962; Member since: Mar 29, 2019

China is only one country. Samsung yes in China failed first. But you just picking China. iPhone sales plummet in India, while Ssmsung had gains with th4 S10 which is just as expensive as the iPhone. Explain that?! Apple didnt get that windfall of customers by getting on Chinas largest network. Please remember the only country that buys as many phones as the US is Europe. Apple.sales are falling way faster than Samsung. Samsung took some big hits, but has a lesser fall than Apple did. If Apple increases the iPhone 11 price anymore, it gonna lose 30-50M sales for their next fiscal year. Apple could be selling only 150-170M phones this time. While Samsung will be back up to its usual 300M+. Samsung sold 300M plus phones for 12 years in row. Apple has NEVER DONE IT. Stop bragging about Apple phones sales. Its dumb.

18. Larry_ThaGr81

Posts: 589; Member since: May 26, 2011

Actually it's Apple's market share that has seen the biggest decline since 2016, do your homework before spouting off from the mouth.

19. jacky899

Posts: 427; Member since: May 16, 2017

Look at the facts. Apple sales plummeted in every country, especially low per capita income countries like China, due to their ridiculously high price. Everyone who craved an Iphone already has an Iphone. Almost everyone in China already have an Iphone and they don't need or cannot afford another Iphone especially considering the economic down turn in China. Also few years ago during the Iphone 6s to Iphone 7s era, commenters were blaming Chinese for supporting their own brands because Apple sales was continuously declining with no end in sight. Then all of a sudden the Iphone X, with a complete facial uplift was released, and it was Apple's TOP SELLING, phone in China ever.

14. oldskool50

Posts: 962; Member since: Mar 29, 2019

What? All phone interfere with each phone sales, regardless of platform. You must really be from some time period other than this one.

17. Larry_ThaGr81

Posts: 589; Member since: May 26, 2011

Huawei users that decide to switch away from Huawei phones will prioritize the mobile OS or who the manufacturer of the phone is. Since Huawei is uses Android OS, then it would make since for those that switch away from Huawei to prioritize Samsung, LG, OnePlus, and so on before Apple, hence the reason why Apple production only slightly increased. I'm so sorry for those that decide to replace Huawei phones with Apple iPhones.

2. iloveapps

Posts: 715; Member since: Mar 21, 2019

Apple will sell no matter what.

7. Back_from_beyond

Posts: 1300; Member since: Sep 04, 2015

Not as much as it used to.

3. User123456789

Posts: 668; Member since: Feb 22, 2019

Only way Apple has to increase sales again is if Samsung quits mobile. Otherwise they will keep lose clients year after year. Depends on where you live the price of Xs Max 512Gb was enough to buy a motorcycle.

12. Leo_MC

Posts: 6935; Member since: Dec 02, 2011

If you need to compare the price of a phone with the price of a transportation vehicle, you live in the wrong country or your make the wrong kind of money.

6. cmdacos

Posts: 3969; Member since: Nov 01, 2016

There's enough people that are happy with a good enough phone that Apple doesn't need to worry.

10. oldskool50

Posts: 962; Member since: Mar 29, 2019

PA. Why no article about this:https://youtu.be/Dkxv4EO_6Ow Samsung is asking Apple to for the loses Samsung is getting because, Apple ordered a certain amount of displays and Samsung is asking Apple to pay up and Apple has had slow sells and they haven't been requesting as many. You should be showing us this. Maybe because Samsung is in the right. Again!!

13. Leo_MC

Posts: 6935; Member since: Dec 02, 2011

Just like I have said a few times before, Huawei - and other Android OEMs - hardly influence the sales of apple’s products.

15. oldskool50

Posts: 962; Member since: Mar 29, 2019

That's false. Android prevented IOS from becoming the defacto phone standard, just like Windows did to Mac OS. Please tell me you have some type of economic education.

16. Leo_MC

Posts: 6935; Member since: Dec 02, 2011

Android took the place of S40 once clients shift from feature phones to smartphones. In the top of the line smartphone class iOS makes the rules and sets the standards (you have an article about that on PA - read it before posting your usual rant) while Android is a close second thanks to Samsung. People hardly buy Apple products because they are tired of their Huawei devices; they buy Apple for what they get from the ecosystem (the same goes for Samsung or Huawei when compared to Apple); in Android world things are different.

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