Apple seeks to up production of iPhone 11 models by about 10%: Media report

Apple Inc (NASDAQ:AAPL), citing better than expected demand for its iPhone 11 models, has asked suppliers to increase production by about 10%, according to the Nikkei Asian Review.  

The production boost would add up to 8 million units to what the Cupertino, California-based company had initially planned on, the newspaper reported Friday, citing sources. 

“Previously, Apple was quite conservative about placing orders,” which were less than for last year’s new iPhone, a source said. “After the increase, prepared production volume for the iPhone 11 series will be higher compared to last year.’’

Read: Apple stock jumps on JP Morgan’s price-target bump, increased iPhone sales projections

The recent surge in iPhone orders is concentrated in the cheapest iPhone 11 model and the iPhone 11 Pro model, while Apple has slightly revised down orders for its top-range model, the iPhone 11 Pro Max, which has a starting price of $1,099.

However, suppliers remain cautious and said they were concerned that the higher level of orders may not be sustained.

“Demand is good for now. But we have to be careful not to be too optimistic,” an executive-level source said in the report. “I hope that this year’s peak season lasts longer than last year.”

The company launched its three new iPhone models in September and reduced the starting price of the model upgrade, despite better cameras, to $699, compared to $749 for last year’s iPhone XR.

It is not unusual for Apple to gradually ramp up orders as it gauges demand after launch and builds up to the holiday shopping season. The company has stuck with a previous projection for sales of up to 75 million new iPhones in the second half, sources told the newspaper. 

Apple’s stock recently traded up 2.3% to $225.90 a share in pre-market trading.

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Story by ProactiveInvestors