Apple Reportedly Slashes iPhone 17 Demand Forecast Amid Rising Costs

[MacRumors]

Apple has significantly lowered its demand expectations for the standard iPhone 17 because of rising hardware costs, a Chinese leaker claimed today.

According to the account "Fixed Focus Digital" on Weibo, some production lines for the standard iPhone 17 this week shifted from an earlier 15 percent reduction to plans to suspend roughly one-third of their capacity. The leaker also claimed Apple has made a "very serious" internal assessment of the impact that higher hardware costs could have on demand.

The claims can't be independently verified, plus the post doesn't say whether the production adjustments apply to overall iPhone 17 output or only to certain manufacturing lines, so caution is advised.

Higher component costs are impacting the electronics industry worldwide due to intense demand from AI companies intent on maximizing data center buildout, and Apple is far from immune.

The doubling cost of memory and storage chips over the last year recently led Apple to increase prices across multiple product lines, which CEO Tim Cook called "unavoidable." So far, iPhones have been spared the hikes, but Apple is widely expected to use the debut of iPhone 18 Pro models in September as a chance to increase the prices of its entire smartphone lineup.

Apple is expected to unveil a next-generation iPhone 18 model next spring alongside a new iPhone 18e and iPhone Air 2, as part of a new split-launch strategy.

Article Link: Apple Reportedly Slashes iPhone 17 Demand Forecast Amid Rising Costs

 

[Lukomaldini]

Call me naive but slashing demand forecasts because of rising hardware costs makes no sense. Unit cost isn’t a demand factor. If the rising cost of memory caused Apple to increase prices of phones then yes, that would cause demand to fall.

If the price is flat, why would demand fall unless there is exogenous factors affecting market demand…

 

[one more]

Makes sense. So it’s about 30% production reduction of almost a year-old model, for which they cannot easily raise prices mid-cycle.

 

[Korito]

I got iPhone 17 as my business phone, and it's awesome. 6.3" is almost perfect, smoothness, screen, everything is better. I love the cameras position. I only buy pro models because of the camera's but I am going to review that as I don't take that many photos anyway. I might just switch to standard model as it's a beast.

 

[one more]

Call me naive but slashing demand forecasts because of rising hardware costs makes no sense. Unit cost isn’t a demand factor. If the rising cost of memory caused Apple to increase prices of phones then yes, that would cause demand to fall.

If the price is flat, why would demand fall unless there is exogenous factors affecting market demand…

I guess their logic is that whoever wanted iPhone 17 got it by now and they are better off saving the components for iPhone 18 Pro and Fold lines.

 

[Nik]

Demand is consumer-side. Slashing the forecast for demand only makes sense if price increases for iPhone are imminent. Buckle up.

 

[one more]

I got iPhone 17 as my business phone, and it's awesome. 6.3" is almost perfect, smoothness, screen, everything is better. I love the cameras position. I only buy pro models because of the camera's but I am going to review that as I don't take that many photos anyway. I might just switch to standard model as it's a beast.

Agreed, iPhone 17 has the best value/feature ratio of the entire 17 lineup.

 

[lapstags]

Good hopefully they feel the pain of their greed

 

[Happy_John]

Makes sense. So it’s about 30% production reduction of almost a year-old model, for which they cannot easily raise prices mid-cycle.

They have also already sold a hell of a lot of them, unsurprising given how good a phone it is compared to previous non-pro iPhones, so demand will tail off. Not quite market saturation, but I imagine the buyers now are people who are replacing a broken phone, nather than being driven by FOMO and marketing.

A large amount of the users who were going to buy an iPhone 17 have already bought an iPhone 17.

 

[klasma]

Call me naive but slashing demand forecasts because of rising hardware costs makes no sense. Unit cost isn’t a demand factor. If the rising cost of memory caused Apple to increase prices of phones then yes, that would cause demand to fall.

Of course they’ll raise the price. It’s just not how they communicate the reasons for forecast changes to their suppliers.

 

[Astuces iOS]

Apple don't care about customers, they care about making money !

 

[Contact_Feanor]

Its called price elasticity of demand. The higher the price the lower the demand.

I and my family are in need of a new phones this year, so where we had maybe bought the iPhone Pro in years past we may just get the iPhone, or better yet defer and not buy one this year.

The problem I have is, Apple is still maintaining a 30% plus profit margin, they could absorb these price hikes and still be profitable.

Only the prices are still the same, so why would there be less demand?

 

[Contact_Feanor]

Good hopefully they feel the pain of their greed

the prices of the iPhone 17 are still the same...

 

[Contact_Feanor]

Apple don't care about customers, they care about making money !

and how do they do that without customers?

 

[Happy_John]

Apple don't care about customers, they care about making money !

You are aware that Apple is a corporation, and not a religion, a charity or a "community"?

Apple designs stuff, outsources the manufacturing of that stuff, and then sells that stuff at a profit. They need customers to buy. And the customers did and do buy.

This isn't news.

 

[Happy_John]

Only the prices are still the same, so why would there be less demand?

Because there isn't an infinite amount of potential buyers who want an iPhone 17 but who have not yet bought an iPhone 17.

Prices obviously will increase, but a reduction in demand may not be exclusively caused by price increases. Approaching market saturation will slow demand.

 

[HouseLannister]

Demand will fall, but only when the prices go up. Carriers were most likely given fixed price contracts that expire in September, so I expect a price increase then even if there is no base iPhone 18 to replace this phone until March or so. Then demand will crater. Hopefully Apple stockpiled enough to meet the reduced demand until Spring.

 

[Fumblerooskie]

Its called price elasticity of demand. The higher the price the lower the demand.

I and my family are in need of a new phones this year, so where we had maybe bought the iPhone Pro in years past we may just get the iPhone, or better yet defer and not buy one this year.

The problem I have is, Apple is still maintaining a 30% plus profit margin, they could absorb these price hikes and still be profitable.

Why are you all “in need” of new phones?

Who should set profit margins? The free market, or a government regulatory entity, perhaps?

The result of memory prices increasing exponentially is likely to be consumers holding on to phones for a longer period of time. Since Apple makes reliable, robust hardware, it won’t be much of an issue.

AI, depending upon its usefulness to the end user, will drive future sales of new models. Like so much tech, most users won’t use a fraction of the capabilities and would do fine with cheaper hardware.

 

[antnythr]

… the post doesn't say whether the production adjustments apply to overall iPhone 17 output or only to certain manufacturing lines, so caution is advised.

Why is caution advised?

 

[Fumblerooskie]

Good hopefully they feel the pain of their greed

I wouldn’t get too hopeful. AAPL stock hit an all time high yesterday. Does this bother you?

Is gweedy Apple somehow forcing people to buy their products?

 

[mikethebigo]

But the price hasn’t changed?

 

[adrianlondon]

I paid the standard price of Fr.799 (just under US$1000) for my sage iPhone 17 last September. I thought it was great value, and a clear upgrade from my 11.

Today, a department store (Manor) had them all on sale for Fr.649. They sold out very quickly.

 

[Happy_John]

Demand will fall, but only when the prices go up. Carriers were most likely given fixed price contracts that expire in September, so I expect a price increase then even if there is no base iPhone 18 to replace this phone until March or so. Then demand will crater. Hopefully Apple stockpiled enough to meet the reduced demand until Spring.

They will crater, but not more significantly than they do every year when new iPhones are released.

I fully agree with you that iPhone price increases will be delayed until September, precisely because of phone carriers.

Higher pricing is likely to be less extreme on iPhones than other Apple kit, given that many phones are bought on 24 month contracts, and the extra cost will seem far easier to stomach when spread across those 24 payments.

The interesting thing to see will be what buyers of base iPhones on contract will do in the last quarter this year when it is time for contract renewal - will they upgrade to an 18 pro rather than a base iPhone, will they go for an Air instead? Will they hang on until a new base iPhone appears?

I think iPhone 18 Pro sales will be a far better indicator of whether the consumer is being squeezed too hard. Someone with a base iPhone 16 since late 2024 via a carrier, and that contact will end before then end of 2026, may be very tempted to go for an 18 pro or even an Air, but if they are counting the pennies and tightening their belts, they mightn't.

So I think that iPhone 18 pro sales /order /demandfigures will be far more informative than iPhone 17 sales/order/demand figures.

 

[headlessmike]

Apple don't care about customers, they care about making money !

Can’t have one without the other. A company cannot survive without making money, and to do so they need to keep customers happy enough to buy their products.

 

[jonnysods]

It makes sense to cut production aren't they 2 months from announcing the new one?

I got 2 17's this year, I was going to wait for the 18 but I know they will probbaly reduce some features, and increase the price. The 17 was my first non pro phone since the 11 Pro, and I haven't noticed a difference and the price was 'okay'. These should suit the missus and I for the next few years!