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Apple Delays Production of New iPhones: WSJ

By MBN Staff | Mon, 04/27/2020 - 12:04

The COVID-19 crisis has led to diminished demand in several sectors. One of them is electronics. That is why Apple decided to hit the brakes on production of new iPhones by as much as 20 percent for about a month and to discontinue manufacturing in Asia, people familiar with the matter told the Wall Street Journal. Still, Apple has not halted its plans to launch four new iPhone models in late 2020, which will feature 5G technology.

On April 15, the company launched the iPhone SE priced at US$399, lowering the starting price of the company's smartphone lineup in a move to attract the attention of people who are extremely careful with their budget right now. But the new iPhone might fail to attract many in China, as analysts highlight its lack of 5G capability. China is Apple’s third-biggest market, accounting for roughly 15 percent of its sales. However, its market share in the country has shrunk over the past several years as Chinese Android brands like Huawei increasingly release higher-end phones. Last month, Xiaomi announced models with 5G features starting at about US$425.

Until a few months ago, Deloitte predicted that the arrival of 5G would be until 2025 at a commercial level. Telecommunications consultant The Competitive Intelligence Unit (The CIU) also predicted a delay in the deployment of this network of at least 18 months. However, the crisis unleashed by COVID-19 caused companies to accelerate the process to provide a faster and more powerful connection.

In March, Bank of America said that an iPhone with 5G technology could be delayed because of the pandemic. Also, JP Morgan said Apple's new iPhone could be delayed by a month or two. 

On Thursday, Apple will report its 1Q20 results, which will be the first glance at how COVID-19 has affected the Silicon Valley company. Back in February, Apple said it did not expect to meet its revenue forecast. In September 2019, iPhone sales fell 14 percent. Analysts estimated the percentage was at 188 million units, as the company stopped publishing shipments quarterly.

Last Friday, US President Donald Trump said he spoke with Apple CEO Tim Cook about the COVID-19 pandemic and his outlook for the economy. The president said Cook is betting on a "V-shaped recovery.”

The data used in this article was sourced from:  
Wall Street Journal
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