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Shares of Apple fell about 3% on Wednesday on a report that the company has told suppliers to bail on plans to increase iPhone 14 production. Demand for the new models failed to spike as high as anticipated, according to Bloomberg.
Apple will no longer aim to increase production by 6 million units in the second half of the year as it had planned, according to the report. The company will strive to produce 90 million units instead, which is roughly in line with Apple’s forecast and production from last year, according to Bloomberg.
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The report also impacted Apple suppliers and manufacturers. Shares of key chipmaker Taiwan Semiconductor Manufacturing also fell about 3%. Shares of Hon Hai, also known as Foxconn, were down about 2.9%. Foxconn builds Apple’s iPhones.
Demand for the iPhone 14 Pro is higher than for the other new phones, Bloomberg reported, leading at least one Apple supplier to shift production capacity from the lower-tier models to the premium version.
Later on Wednesday, analyst Ming-Chi Kuo, whose predictions about Apple have often proven accurate, said on Twitter that he did not expect an overall production increase in the first place, but reiterated his prediction that production would shift to the 14 Pro and Pro Max, calling demand for the regular iPhone 14 and 14 Plus “obviously lackluster.”
“I continue to expect total 2022/4Q22 iPhone shipments to be roughly aligned with consensus despite many people worrying about the recession,” he wrote in a thread:
An Apple representative declined to comment.