As the world struggles to contain the COVID-19 pandemic, Apple suppliers expect a drop in immediate orders due to declining demand.
Apple suppliers have reportedly seen their parts orders decrease for the current quarter.
According to a Reuters report released on Friday, a major subcontractor to Apple projects an 18% year-over-year contraction in orders for the current March quarter.
Weak demand in a number of markets is expected as the global economy bends under the pressure of the ongoing pandemic, the effects of which could persist throughout the year. Initially, companies expressed concern about the loss of workers, but consumer demand has become a more pressing problem as the situation normalizes in China.
“No one is talking more about manpower or a shortage of equipment (in China). Now everyone is trying to find out if demand from the United States and Europe could keep up,” a source told Reuters. person close to the case. “The focus is now on consumer demand in the United States and Europe.”
Another supplier, which supplies iPhone screens for the tech giant, anticipates a 17% drop in orders, according to a source familiar with the matter. The company originally planned to move 70 million iPhone screens in 2020, but has since reduced that estimate to 58 million units.
At least one company, an iPhone sensor provider, posted gains this quarter and forecasts growth in the first and second quarters of 2020.
“We received forecasts for this quarter before the pandemic, about a month ago,” said someone close to the situation last week. “And now we are still producing according to the forecasts given to us.”
Looking ahead, the report says Apple has launched production acceleration for a next-generation “iPhone 12” with 5G capabilities, although the handset may still be launched in the fall. The claims mirror those in a report released earlier this week that Apple plans to suspend its typical launch cycle monthly to avoid lukewarm reception. Development bottlenecks resulting from COVID-19 travel restrictions may also play a role in the decision, the report said.
For now, major Apple suppliers such as the TSMC A-series chip maker and Taiwanese circuit board manufacturers are expected to move ahead according to Apple’s usual fall release schedule.