Apple Suppliers Worried About iPhone Demand, Production Ramp-Up for New iPhones Reportedly Postponed

[Peza19]

If one looks at the stock markets, and the businesses that are already folding, plus staff are being laid off, I think it’s obvious that people are not going to be in the mindset of spending several hundreds to over a thousand for a new iPhone, or any phone.
Some economists have been reporting we will see a long deep recession worst then 2008 after this virus. I certainly wouldn’t believe a word Trump states on bouncing back in a matter of weeks!

We shall have to wait and see the state we are all left in financially but I certainly understand the worries of the supply chain.
If you look at other sectors such as entertainment, we have films being postponed from launch, being offered at a high cost to stream instead of seeing cinema launches, and some film productions being stopped or postponed, big titles too, this is in relation to the lockdowns but it will have a financial impact too.
Then you have Sony and Microsoft both intending to launch there new games consoles at the end of the year, I wonder how much they have had to change there strategies with this outbreak? They no doubt both expect the new machines to be big money earners for the companies, but perhaps not so much for a while?

Well, in about a week, at the current increasing rate (doubling every 3 days), Italy will have had more Covid 19 deaths in a month, than flu deaths in 2018.

The UK government said last night that they would do well to contain Covid 19 deaths to < 20,000...which would be around 3 times the flu rate last year.

Personally, I think ithe whole, “it’s just flu” is the reason the whole world is totally ill-prepared

In regards to the UK, I can’t remember if I read it or saw it on the news, but experts have stated every government has or should have mass pandemic plans, it is the number one potential mass killer outside war. It they stated the British plans for an outbreak were outdated and not regularly worked on due to Brexit, the plans were left to the side as they were too busy planning and dealing with leaving the EU, or attempting to stop it. So now a dangerous pandemic has hit they are having to make it up as they along due to the existing plans being outdated.
I would concur with this line of thinking. I also read a very interesting article, which is behind a pay wall unfortunately, which criticised the mathematical modelling that is the basis for this lockdown, there are far too many variables to warrant any data as being valid, chiefly that hardly anyone has actually been tested for the virus, yet it is a key advice that the government has used for its strategy. Interestingly this group from Imperial College London who makes these models and provide the advice, also predicted thousands of deaths from Mad Cow Disease, currently only around 200 have been reported to have died from it in the UK. Certainly makes you think if the strategy is right or not that we are following.

 

[glowplug]

If demand does fall off, we might see the return of carrier subsidy.

 

[dilbert99]

tbh I dont really see a huge decrease of iPhone demand in 2020. Maybe a bit, but not much.
The two year contracts will still be taken out no matter what. Other puchases will simply be postphoned to summer / fall 2020.

When the economy tanks and people die or lose their jobs, there could be less demand for iPhones.

 

[Freeangel1]

hope this article is not true but I believe the UK a lot more than I believe China
If True we wont see a New iPhone model for a while.

Boris Johnson's government is reportedly furious with China and believes it could have 40 times more coronavirus cases than it claims

UK government sources quoted on Sunday say China faces a "reckoning" over its handling of the coronavirus crisis.

www.yahoo.com

 

[Peza19]

hope this article is not true but I believe the UK a lot more than I believe China
If True we wont see a New iPhone model for a while.

Boris Johnson's government is reportedly furious with China and believes it could have 40 times more coronavirus cases than it claims

UK government sources quoted on Sunday say China faces a "reckoning" over its handling of the coronavirus crisis.

www.yahoo.com

I wouldn’t be so trust worthy of the British government and there word, they ran a 3 day nationwide exercise in 2016 to test the preparedness of the UK against a pandemic, they based it around a flu epidemic. The results highlighted the exact situation of unpreparedness we are now in including lack of equipment and beds, the UK government ignored the results of this exercise it instigated and buried it, they deemed the results to be ‘too sensitive for the public to know’. It’s been all across British media today:

http://www.england.nhs.uk/wp-content/uploads/2017/03/board-paper-300317-item-10.pdf

Government pandemic exercise four years ago predicted NHS shortages

In October 2016, epidemiologists from Imperial College London told Government ministers what Britain would look like seven weeks into a pandemic.

www.google.co.uk

UK 'warned 3 years ago' that pandemic would swamp NHS with ‘terrifying' results

The major test - codenamed Cygnus - has emerged amid the coronavirus crisis after three years ago it found that hospitals would run out of intensive care beds and mortuaries would be overwhelmed should a pandemic strike

www.google.co.uk

Exclusive: Exercise Cygnus warned the NHS could not cope with pandemic three years ago but 'terrifying' results were kept secret

Ministers were informed three years ago that Britain would be quickly overwhelmed by a severe outbreak

www.telegraph.co.uk

And that’s ignoring parliaments behaviour over the expenses scandal and Brexit..

There is talk the UK lockdown could continue till June, that I think is to be expected maybe even into July, but the economy will receive a huge blow by then and it will impact all sales of electronic goods and services. Streaming services should do very well though.

 

[x-evil-x]

Its not like I was gonna buy one anyway. Its an unpredictable time right now and I think for the common man and woman, they are worried about will there by any money to pay rent, buy food; will they even have a job in two months, will their health be intact. Luxury like this will not be at the top of the list. Pre COVID, your average person might have splurged on a new iPhone come fall. Sure, the super wealthy, those making 200k per year or even 75K will buy it, but just understand, thats not a reflection of the market. The iPhone is an aspirational device, but not everyone can afford to spend that amount right now.

who wants to bet come September for the launch you will see buy one get one deals from carriers. There will be more of those deals this year in particular. Meanwhile I got my XS max and my moms XR thrown in when I got mine. The carriers will want to keep us as customers and be offering these deals for 2 months.
I don't see many people upgrading if they don't have these deals though unless they are more wealthy.

 

[aandre]

I’m still waiting for an iPhone 2.

 

[ani4ani]

If one looks at the stock markets, and the businesses that are already folding, plus staff are being laid off, I think it’s obvious that people are not going to be in the mindset of spending several hundreds to over a thousand for a new iPhone, or any phone.
Some economists have been reporting we will see a long deep recession worst then 2008 after this virus. I certainly wouldn’t believe a word Trump states on bouncing back in a matter of weeks!

We shall have to wait and see the state we are all left in financially but I certainly understand the worries of the supply chain.
If you look at other sectors such as entertainment, we have films being postponed from launch, being offered at a high cost to stream instead of seeing cinema launches, and some film productions being stopped or postponed, big titles too, this is in relation to the lockdowns but it will have a financial impact too.
Then you have Sony and Microsoft both intending to launch there new games consoles at the end of the year, I wonder how much they have had to change there strategies with this outbreak? They no doubt both expect the new machines to be big money earners for the companies, but perhaps not so much for a while?



In regards to the UK, I can’t remember if I read it or saw it on the news, but experts have stated every government has or should have mass pandemic plans, it is the number one potential mass killer outside war. It they stated the British plans for an outbreak were outdated and not regularly worked on due to Brexit, the plans were left to the side as they were too busy planning and dealing with leaving the EU, or attempting to stop it. So now a dangerous pandemic has hit they are having to make it up as they along due to the existing plans being outdated.
I would concur with this line of thinking. I also read a very interesting article, which is behind a pay wall unfortunately, which criticised the mathematical modelling that is the basis for this lockdown, there are far too many variables to warrant any data as being valid, chiefly that hardly anyone has actually been tested for the virus, yet it is a key advice that the government has used for its strategy. Interestingly this group from Imperial College London who makes these models and provide the advice, also predicted thousands of deaths from Mad Cow Disease, currently only around 200 have been reported to have died from it in the UK. Certainly makes you think if the strategy is right or not that we are following.

Yes, I have read similar reports and Imperial college does seem to be driving much of the strategy [it is their model the CMO often refers to on the briefings]. The problem with these models with a new virus is that the data is so limited and so the inputs will have provide a huge variation in potential outcomes; it's probably conjecture on my part, but I think the modelling was based on flu at first and that is why the measures originally put in place were almost optional. Then around about two weeks ago, it was clear from Spain and Italy that things were entirely different to flu and the government then had to bring in the far more draconian measures we are currently experiencing and potentially more to come.

I am torn with the view re testing and whether more should have been done early on or now; it is hard to say if more testing had been done early on whether there would have been so many negatives it would have given a false impression of the threat, given that UK deaths only started around 6 weeks after the first case was reported [Italy's first case was detected one day after the UK], so in all likelihood few people were infected at the time. It is now too late and so the only merit to testing for people with the virus to see if frontline medical and care staff have it. After that then the antibody test will be crucial and will give everyone an idea of those who have had it.

 

[Baymowe335]

80k never happened. From CDC's own website: estimates on this page are different from previously published and reported estimates for 2017-2018? (For example, total flu-related deaths during 2017-2018 was previously estimated to be 79,000, but the current estimate is 61,000)

Last year was 34k. The 2016-2017 was 38k. So even 61k was very abnormal.

Yes, it's been changed to 61,000 in America. Still a lot and it still happened. Just shows the flu can crop up in any year and be pretty devastating with almost zero news coverage.

Covid 19 has stopped the world and we aren't near the death rates of that flu year.

I will say, I am open to conceding it could get worse. I'm mildly concerned it hasn't shown much slow in the last week or so, despite the efforts to distance. That tells me there are a lot more infected than known, which is a good and bad thing. Bad news is, we are going to have more deaths. Good news is, mortality is likely more in line with the flu.

As I said earlier, you just have to believe there are 2-3M cases in the US instead of the reported 140K cases to see mortality rates go to flu like levels. I have no trouble believing the cases are the millions with the way it's spreading.
[automerge]1585509701[/automerge]

Well, in about a week, at the current increasing rate (doubling every 3 days), Italy will have had more Covid 19 deaths in a month, than flu deaths in 2018.

The UK government said last night that they would do well to contain Covid 19 deaths to < 20,000...which would be around 3 times the flu rate last year.

Personally, I think ithe whole, “it’s just flu” is the reason the whole world is totally ill-prepared

Not sure what's going on in Italy, but they still have 10,500 deaths from what I see. I mean, 61,000 Americans died of the flu in the 2017-2018 flu season, so there is still quite a distance there. I don't know what Italy's flu deaths were that year, but I'll take your word.

Point is, the flu was bad in that year and there was basically no news on it...and of course, zero economic stoppage.

As I said, I'm somewhat concerned our efforts haven't seemed to slow it, but optimistic this maybe means the spread is far greater and people are not dying.

 

[Peza19]

Yes, I have read similar reports and Imperial college does seem to be driving much of the strategy [it is their model the CMO often refers to on the briefings]. The problem with these models with a new virus is that the data is so limited and so the inputs will have provide a huge variation in potential outcomes; it's probably conjecture on my part, but I think the modelling was based on flu at first and that is why the measures originally put in place were almost optional. Then around about two weeks ago, it was clear from Spain and Italy that things were entirely different to flu and the government then had to bring in the far more draconian measures we are currently experiencing and potentially more to come.

I am torn with the view re testing and whether more should have been done early on or now; it is hard to say if more testing had been done early on whether there would have been so many negatives it would have given a false impression of the threat, given that UK deaths only started around 6 weeks after the first case was reported [Italy's first case was detected one day after the UK], so in all likelihood few people were infected at the time. It is now too late and so the only merit to testing for people with the virus to see if frontline medical and care staff have it. After that then the antibody test will be crucial and will give everyone an idea of those who have had it.

Yes, I believe they will test as many people as they can eventually, to provide as accurate picture as they can get as to how it spread. It is estimated over a million people, can’t remember the exact figure, have the virus in the U.K. it’s going to be very interesting how effective the social distancing is.

 

[sofila]

Yes, it's been changed to 61,000 in America. Still a lot and it still happened. Just shows the flu can crop up in any year and be pretty devastating with almost zero news coverage.

Covid 19 has stopped the world and we aren't near the death rates of that flu year.

I will say, I am open to conceding it could get worse. I'm mildly concerned it hasn't shown much slow in the last week or so, despite the efforts to distance. That tells me there are a lot more infected than known, which is a good and bad thing. Bad news is, we are going to have more deaths. Good news is, mortality is likely more in line with the flu.

As I said earlier, you just have to believe there are 2-3M cases in the US instead of the reported 140K cases to see mortality rates go to flu like levels. I have no trouble believing the cases are the millions with the way it's spreading.
[automerge]1585509701[/automerge]

Not sure what's going on in Italy, but they still have 10,500 deaths from what I see. I mean, 61,000 Americans died of the flu in the 2017-2018 flu season, so there is still quite a distance there. I don't know what Italy's flu deaths were that year, but I'll take your word.

Point is, the flu was bad in that year and there was basically no news on it...and of course, zero economic stoppage.

As I said, I'm somewhat concerned our efforts haven't seemed to slow it, but optimistic this maybe means the spread is far greater and people are not dying.

You'll definitely be recognised and be remembered as the one who understood it late. You and your numbers, you're biased from your AAPL position and the fear of losing any money. Numbers are useful when you look for the naked truth, not when you look something to confirm your thoughts.

 

[V_Man]

Yes, we've heard your 3-4 statements repeated by the media ad nauseum. We don't know the actual mortality of COVID19 because undiagnosed cases are everything. This is immensely under-reported, of course. It's much better for ratings to keep pumping death and destruction. If I said 10M Americans currently are infected, it would be good news. It would mean mortality is extremely low (since every death in America at least is reported) and it would mean we are developing some serious immunity while not all dropping dead or going to the hospital. There are a few bad pockets in the US, but most places are doing OK.

I'm equally tired of people talking about heard immunity, contagious, and vaccines that don't work reliably and aren't used. Heard immunity and vaccines didn't do much to curb the 80,000 Americans that died in 1 year from the flu. Objectively, that is "worse" by the death measure...which is frankly why people are freaking out. Additionally, the flu is evidently rather contagious too, with up to 800,000 worldwide dying from the flu and as many as 1 BILLION worldwide cases annually.

I'm not saying this IS the flu, but imagine if in 2018, the media reported every single death and case of the flu. Don't you think you would have been a little more afraid? Don't underestimate how much the media shapes your thinking.

Again, let's be careful about our projections using early data and keep some perspective. The flu of 2018 is your perspective and can't be ignored. This isn't worse than the flu of 2018, yet. I support the measures taken to curb the spread of COVID19 and am doing my part by literally not leaving my house, working from home, and sanitizing like crazy.

Regarding iPhone demand...it's going to be like a coiled spring if and when we get some good news. Many Americans are going to get $3,000 that will be almost like a bonus if they don't lose their jobs. Sadly, some will, but hopefully it's temporary. The iPhone is almost 6 months from now. I have faith in our scientists, drug companies, and everyone involved that we will get some good news.

We get it. You don’t think this is anything to worry about.

 

[PickUrPoison]

Not sure what's going on in Italy, but they still have 10,500 deaths from what I see. I mean, 61,000 Americans died of the flu in the 2017-2018 flu season, so there is still quite a distance there. I don't know what Italy's flu deaths were that year, but I'll take your word.

Point is, the flu was bad in that year and there was basically no news on it...and of course, zero economic stoppage.

As I said, I'm somewhat concerned our efforts haven't seemed to slow it, but optimistic this maybe means the spread is far greater and people are not dying.

There isn’t quite a distance at all, Italy has a population of 60 million. Those 10,500 deaths are roughly proportional to the 61,000 deaths the US saw in the 2017-2018 flu season. And it happened in a month. A tragedy to be sure.

Comparing COVID-19 to flu downplays the differences that make it potentially so much worse than the flu, and the sooner you stop doing it, the better.

 

[Baymowe335]

You'll definitely be recognised and be remembered as the one who understood it late. You and your numbers, you're biased from your AAPL position and the fear of losing any money. Numbers are useful when you look for the naked truth, not when you look something to confirm your thoughts.

I think the DOW is going to 12,000. I'm not afraid because I'm buying more and more. I'm never afraid of losing money because my holding period is forever. If I'm wrong and we are screwed, money doesn't matter anyway and I have enough even if stocks lose 90% of their value.

It doesn't matter what I think because the market is already reacting. My contention is that this has been largely fueled by the media and few people are maintaining perspective. I'm also telling people they are wrong to predict things like this will kill more than all wars combined and other speculation based on current mortality and other nonsense. It's junk math and worse logic.
[automerge]1585519706[/automerge]

We get it. You don’t think this is anything to worry about.

It certainly is, but there are other things than are objectively worse and there is a possibility to overreact with measures that are worse than the virus. The measures taken are unprecedented and I'm not sure it matches with reality.

I support the social distancing measures currently in place, but question their effectiveness due to our inability to implement like Asia. If the virus is out, shutting down the economy is largely going to be worthless and will cause great harm, perhaps greater than the virus has, will, or would have.

 

[Baymowe335]

There isn’t quite a distance at all, Italy has a population of 60 million. Those 10,500 deaths are roughly proportional to the 61,000 deaths the US saw in the 2017-2018 flu season. And it happened in a month. A tragedy to be sure.

Comparing COVID-19 to flu downplays the differences that make it potentially so much worse than the flu, and the sooner you stop doing it, the better.

I'm not so much comparing them as I am comparing the impact, one of which you haven't heard about pretty much at all and this has stopped the world. Deaths from the flu gives perspective, nothing else.

I'm also a SUPPORTER of current measures to tackle this, but I'm NOT supportive of ridiculous predictions based on early numbers and constant doom and gloom fear mongering from the media who is not helping this situation.

I reserve the right to change my opinion as more facts come in, but I'm not completely freaking out with what I'm seeing. I seem to be in the minority on that. Maybe I'm an idiot.

 

[alexandr]

Its not like I was gonna buy one anyway. Its an unpredictable time right now and I think for the common man and woman, they are worried about will there by any money to pay rent, buy food; will they even have a job in two months, will their health be intact. Luxury like this will not be at the top of the list. Pre COVID, your average person might have splurged on a new iPhone come fall. Sure, the super wealthy, those making 200k per year or even 75K will buy it, but just understand, thats not a reflection of the market. The iPhone is an aspirational device, but not everyone can afford to spend that amount right now.

just understand, what you wrote is not a reflection on the market either. it's speculation that really isn't based on anything other than panic. millions of people who have iphones, worried about their jobs and rent pre covid.

besides, the hope is that by the time a new iphone is released, this will be, at least in part, behind us.

 

[wellander1]

If they look at apples history they should not be worried.
Look at the iPod right after the 11-09-01 attacks In the us.

 

[Mr. Dee]

just understand, what you wrote is not a reflection on the market either. it's speculation that really isn't based on anything other than panic. millions of people who have iphones, worried about their jobs and rent pre covid.

besides, the hope is that by the time a new iphone is released, this will be, at least in part, behind us.

A hope this will be all behind us, a hope. The fact that 3.3 million people have already filed for unemployment, on top of those who already have an iPhone and are happy with it, this is likely not a great year for the iPhone. The past couple of years have even proven that, the iPhone XR and XS didn’t sell spectacularly until Apple started offering significant discounts. So, there are many variables here for this not to go as well. There is also the elephant in the room - market saturation, but COVID-19 further exacerbates that.

Who would have imagined a couple months ago Apple would move WWDC online only? Who would have imagine the company closing all its stores and sending all its employees home? Who would have imagine NY would be an epicenter.

 

[hybroid]

There's still plenty of people with stable jobs and income and looking forward to new gear. Saying there's no point doing anything until this is all over is incorrect and misleading. I'm in the market for an iPhone 12 Pro.

 

[1rottenapple]

There's still plenty of people with stable jobs and income and looking forward to new gear. Saying there's no point doing anything until this is all over is incorrect and misleading. I'm in the market for an iPhone 12 Pro.

Ya I think innovation and progress will need to keep going forward. Because each release will build on features. It may not be a sales block buster but as my mentor says, “the sun will rise tomorrow.”

 

[ericwn]

There's still plenty of people with stable jobs and income and looking forward to new gear. Saying there's no point doing anything until this is all over is incorrect and misleading. I'm in the market for an iPhone 12 Pro.

Nobody is disputing that some will have no impact on their lives or at least jobs. Will it be the same amount of customers as last year given the current climate? Highly doubtful.

 

[ericwn]

Ya I think innovation and progress will need to keep going forward. Because each release will build on features. It may not be a sales block buster but as my mentor says, “the sun will rise tomorrow.”

It’s a plateaued, deeply saturated market, innovation is only seen on a component basis and the yearly updates are incremental at best.

We Heard- over and over that people will update less often, for the last few years. The crisis is only pushing this behaviour even further.

 

[jdiamond]

tbh I dont really see a huge decrease of iPhone demand in 2020. Maybe a bit, but not much.
The two year contracts will still be taken out no matter what. Other puchases will simply be postphoned to summer / fall 2020.

For people who are pressed to upgrade, you might see them forced to switch to the lowest end models for affordability. Apple is targeting that on the laptop side with low end configurations of the Macbook Air and iPad Pro + keyboard. So probably some hit on unit sales, but a bigger hit on profit margins and net income. Of course, Apple, could emulate Volkswagen and give people iPhone with no interest and no payments for a year. That'd make people worry less.

Some could even turn to eBay. You could get a new in box iPhone 6S/128GB for around $300 these days.

 

[alexandr]

A hope this will be all behind us, a hope. The fact that 3.3 million people have already filed for unemployment, on top of those who already have an iPhone and are happy with it, this is likely not a great year for the iPhone. The past couple of years have even proven that, the iPhone XR and XS didn’t sell spectacularly until Apple started offering significant discounts. So, there are many variables here for this not to go as well. There is also the elephant in the room - market saturation, but COVID-19 further exacerbates that.

Who would have imagined a couple months ago Apple would move WWDC online only? Who would have imagine the company closing all its stores and sending all its employees home? Who would have imagine NY would be an epicenter.

i'm sure they will keep all of this in mind. perhaps the production volume will be different. i don't see them not releasing a new phone though. and though this may sound silly, companies releasing new products makes people feel that everything is more or less ok. imho.

 

[44267547]

There's still plenty of people with stable jobs and income and looking forward to new gear. Saying there's no point doing anything until this is all over is incorrect and misleading. I'm in the market for an iPhone 12 Pro.

I totally agree with you. And I’m not trying to downplay anyone that’s lost their job, Because it’s very unfortunate for those who are ‘non-essential’, but some of us do have stability of still having a paycheck during the pandemic, and I’m privileged where I can still purchase what I want/when I want with Apple Products. I realize the economy will suffer in some areas with auto sales Declining, restaurant corporations/locally owned failing, even the banking financial industry is suffering, etc. Aside from all of the ‘job loss’ that we hear about daily, there’s still a lot of industries that are moving forward Just as they did before the pandemic even started, And consumers will still purchase things just like they did before, but some will be forced to conserve/ration Until further notice.