Will the next iteration of the iPhone be a hit or a miss? That remains to be seen. But according to recent reports, Apple is expecting high demand for its upcoming iPhone 7. The tech giant has asked its suppliers to boost production of the new iPhones to between 72 million and 78 million units by the end of this year, representing the highest production target for iPhones since 2014.
The news was first reported today by Taiwan’s Economic Daily Times. Taiwan-based Hon Hai Precision Technology will be the primary assembler for the iPhone 7, working with another Taiwanese company, Pegatron Corp., in the assembly process. Both companies make dual camera and glass casing components in addition to being assemblers.
Foxconn will remain as one of the primary suppliers for the iPhone 7, but Pegatron, a rival company, will contribute toward production. If the report is accurate, the order would far outstrip the anticipated order total of 65 million that was forecast by Wall Street analysts. Apple’s shares got a pre-market bump today in the wake of the Economic Daily News report.
Last year’s iPhone 6s and iPhone 6s Plus (pictured) received a lukewarm response from shoppers, partly due to a lack of impressive new features, according to some analysts. That led to the first-ever decline in iPhone sales.
Who Knows How Many?
Jan Dawson, chief analyst at Jackdaw Research, told us the main problem for Apple with the iPhone right now is not knowing what to expect from sales of its new products.
"The biggest challenge for Apple with the iPhone right now is the sheer unpredictability of demand, as we've recently entered an unprecedented period of year on year declines in sales," said Dawson. "There are so many uncertainties right now in forecasting iPhone demand, driven by the global smartphone slowdown, the lengthening upgrade cycles and other factors. As such, even Apple will likely struggle to forecast with any certainty how many phones they're likely to sell in any given period."
The details of the iPhone 7 have mostly been the product of rumor and speculation. There’s been talk that it would include such features as dual cameras, dual speakers, wireless charging, 256 GB of storage capacity and a glass casing, but no new features have been confirmed. The pattern of previous release dates indicates that the new iPhone will likely be introduced during the first half of September.
Dawson said that if there’s anything Apple wants to avoid, it’s falling short of demand, meaning the ramped-up production figures might be the company’s way of covering its bets.
"I'd expect Apple to err on the side of over supply rather than under supply," he said. "We are coming up to the two-year anniversary of the iPhone 6 launch, which was a huge period for iPhone sales, and even though upgrade cycles are lengthening, two years is still the most common upgrade pattern, which would suggest a big cycle again this time around."
Image Credit: iPhone 6s and iPhone 6s Plus images via Apple.