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<<iPhone 14: hard to replicate long tail effect without production adjustment
Jay Liu, Taipei; Jack Wu, DIGITIMES Asia
Friday 30 September 2022
Despite the drastically different sales performances of the iPhone 14 Pro series and the iPhone 14, Apple DOESN'T appear to be adjusting its production volume. Whether or not the iPhone 14 can recreate the long tail effect of the previous generations remains something to observe.
====> ====> Recently, there have been negative RUMORS about the iPhone 14 floating around the market, such as Apple canceling a previous "production increase plan." However, as of now, BOTH THE SUPPLY AND THE DEMAND SIDES have yet to feel the effect of these rumors.
Most supply chain sources pointed out that, the only order from Apple is to adjust the shipment percentage of the Pro and regular series. There has NEVER been a so-called "production increase plan." The shipping momentum now is mostly still within the estimated range. The increased percentage of the Pro series has even led to improved product mixes for some components.
There had been situations where Apple canceled orders drastically in the second half of the fourth quarter. However, judging by the CURRENT SALES PERFORMANCE and the iPhone's market share, even if there is a reduction in orders, the degree wouldn't be too significant, ACCORDING TO SUPPLY CHAIN SOURCES.
====> ====> As with sales, the two PRO series models are INDEED SELLING VERY WELL. Sources familiar with end-user sales channels stated that since the pre-order launch, the Pro series has undoubtedly been the leading force. MANY channels have their ENTIRE INVENTORIES SOLD OUT EARLY. They had to continue to call products from Apple to keep up with CUSTOMER DEMAND.
As with the non-Pro series sales, there's a clear drop-off. Since the 2022 iPhone 14's upgrades over the previous generation are simply too minor, consumers who care about the price-performance ratio have favored the iPhone 13 and iPhone 13 Pro instead. The iPhone 13 Pro has been pretty much sold out on the retail market after it was taken off the official site.
The iPhone 13's relatively friendly price has also led to it being more popular than the iPhone 14. Apple has attempted to replicate its previous product tiering strategy on the iPhone 14. However, it seems to have gone overboard and has caused the iPhone 14 to receive little attention.
====> Sources from Apple's supply chain pointed out that the increased sales percentage of the iPhone 14 Pro CERTAINLY BENEFITS APPLE'S FINANCIAL PERFORMANCE. The front half of Apple's product strategy has indeed achieved its goal. However, with the iPhone 14's minor upgrades, can it be like its predecessor and continue to maintain a certain sales level until the first half of 2023?
Market sources believe that the current global recession and the reduced purchase power of China, ONE of Apple's major markets, are two major factors that contributed to the iPhone 14's overall lower sales. On top of that, those with medium to low income tend to be impacted harder by the economy, meaning it's more difficult to sell the relatively cheaper iPhone 14.
The Pro series models of this generation could perform better than the previous generation. However, the weak performance of the inexpensive models and the weak global consumer market that could continue in 2023 meant that the long tail effect is harder to achieve. Apple's demand plans for the second half of 4Q22 could lean more and more toward the conservative side.>>