Yahoo Finance Apple expects strong iPhone demand, tells suppliers to produce at 2021 levels
Yahoo Finance Live anchors discuss reports that Apple has asked suppliers to produce as many iPhones as they did in 2021, citing no slow down in consumer demand amid inflation.
Video transcript
BRIAN SOZZI: Anyway, let's stay on all things tech here. Apple looking bullish on its iPhones. According to a report from Bloomberg, the company is asking suppliers to build as many new iPhones as they did last year. Apple built around 220 million iPhones in 2021. This request after CEO Tim Cook said in the June earnings call that the tech giant had yet to see obvious evidence of macroeconomic impacts on its business.
Brad, can't say I'm surprised here. You-- I looked at a lot-- went back and looked at a lot of the analyst coverage after that Apple quarter a couple of weeks ago, and they're seeing a lot of switchers, a lot of consumers giving up Android products and going over to what Apple has to say. And then, oh, yeah, it has not been talked about enough, but is still ongoing. That swift switch to 5G is a real thing. And people are trading up to get these phones.
BRAD SMITH: Yeah, and it's the type of phone as well that they're looking to make here, too. Because let's remember in September, they're also going to come out with what's expected to be four new iPhone 14 models at their launch. This is a critical event that always comes up every September, cyclically, annually. We look through this particular series of products that they're going to announce to see exactly where the consumer demand is and appetite is. And this could be, perhaps, the best consumer discretionary test that we may see going into the holiday season as well.
What type of demand or fanfare really swirls around some of the products that they're expected to launch, whether that's the iPhone 14 models, whether that's the Apple Watch Series 8. I've already got an Apple Watch. You know how much I touch it?
BRIAN SOZZI: Not much.
BRAD SMITH: Not much.
BRIAN SOZZI: Not much.
BRAD SMITH: It sits on the shelf. Like--
BRIAN SOZZI: You wear a normal watch. You're--
BRAD SMITH: Just-- I'm just a normal watch guy now.
BRIAN SOZZI: Normal watch guy. Well, look, you know, I think it fits into this bigger thesis. Like we've talked about all week, the high-end consumer is holding up well. We continue to get signs, whether that's last night-- we got earnings from Xponential Fitness. We'll talk to them a little bit later on in the program. I can tell you, that high end shopper has been able to absorb a lot of this inflation, perhaps, go out there and buy new iPhones.
BRAD SMITH: Well, they're in the camp of Mary Daly, who is not being--
BRIAN SOZZI: She could afford an iPhone, too.
BRAD SMITH: She-- exactly. So that is something to continue to watch here with Apple, especially leading into September.
