Apple Inc. has said that its parts suppliers demand for the iPhone 13 lineup has slowed, according to Bloomberg News. PFCuwcPr&utm source twitter&utm content business&cmpid socialflow-organic utm medium social on Wednesday, a move that signals a decline in interest among consumers for the usually coveted latest upgrades.
The company had cut production of iPhone 13 by as many as 10 million units, down from a target of 90 million, because of a global chip shortage, but now it has informed vendors even those numbers look unlikely, the report said.
Apple's shares fell over 3 per cent, dragging down the parts of the iPhone component and semiconductor suppliers Qualcomm, Skyworks, Europe's ASML and Infineon.
Apple and its suppliers didn't respond to requests for comment from Reuters.
The holiday season is Apple's biggest quarter and typically so, for its most important product, the iPhones, which start at US $699 and go as high as US $1,600.
As supply-chain issues burdened the company as well as retailers who faced inventory shortages, analysts had expected demand to remain steady for new products, but lowered shipping estimates.
Consumers, who splurged on new phones and laptops during the peak of the epidemic, are now spending more on vacations and outdoor activities.
As the lockdowns eased, spending returned on these experiential activities, so may be less for the iPhone. Counterpoint Research analyst Tarun Pathak believes that the demand for iPhones will be pushed out in 2022.
IDC analyst Ryan Reith believes that demand for smartphones is drying up, but U.S consumer spending is slowing due to the Pandemic.
In October, Apple Chief Executive Officer Tim Cook warned that the impact of supply constraints that cost the company US $6 billion in sales in the fourth quarter will be worse during the holiday quarter, even though demand for the new lineup was robust.