09/17/2020

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Demand for iPhones Is Expected to Stay Strong



Apple Orders iPhones for the Fall

Apple (AAPL) and its suppliers are preparing to build at least 75 million 5G iPhones this year. This is on par with the company’s orders in both 2018 and 2019, and shows that it expects demand for its flagship product to remain strong despite economic downturn. Inventors were bullish on the news, sending shares of the Cupertino, California company higher by 3.98% yesterday.

Though COVID-19 has disrupted supply chains and changed consumer habits, people are still flocking to buy Apple products as many prepare for a fall of working and studying from home.

Suppliers’ Shares Surge

Apple’s iPhone sales for last quarter far exceeded Wall Street expectations. The company’s shares climbed about 76% this year, which led Apple to become the first US company to have a market value of over $2 trillion.

Apple’s suppliers are also seeing their shares rise. Taiwan Semiconductor Manufacturing Co. (TSM) and LG Display Co. (LPL) shares have rallied recently. Share of lens maker Largan Precision Co. (3008:TT) and headphone assembly company Goertek Inc. (002241:CH) also got a boost because of Apple’s big orders.

One of Apple’s main iPhone assembly partners Hon Hai Precision Industry Co. (2317:TT), also called Foxconn, is hiring more workers for its factory in Zhengzhou, China, to keep up with orders from Apple.

Product Pricing for a Unique Moment

Apple plans to begin selling four new iPhone models in October. These products will have fifth-generation wireless speeds, a new design, and a variety of screen size options. The company will also roll out a new iPad Air, two fresh Apple Watch models, new over-ear headphones, and several other new products.

For the first time, Apple will offer a basic and a high-end version of each of its new iPhones models at different prices. This may be in response to the company realizing that people are eager to buy its products, but some may be more cost-conscious this year because of the economic downturn. As retailers across many sectors look toward a fall and winter season like no other, many will be watching Apple to see how its strategies turn out.


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