Apple CEO Tim Cook reveals the new iPhone 12.
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Apple shares surged by as much as 4% on Tuesday morning after Japanese news outlet Nikkei said iPhone production is set to rise by 30% in the first half of 2021.
Apple is planning to build up to 96 million iPhones between January and June of 2021, according to anonymous sources cited by Nikkei. That includes the new 5G compatible iPhone 12 models, the iPhone 11 and iPhone SE.
Apple now intends to produce up to 230 million iPhones in 2021, according to Nikkei’s report. That’s 20% more than it made in 2020, Nikkei said. Apple no longer discloses how many phones it sells in its earnings reports.
The report said demand for the iPhone 12 Pro and iPhone 12 Pro is stronger than expected, according to a supplier, but that iPhone 12 mini demand is “sluggish.”
Apple did not immediately respond to CNBC’s request for comment.
Wedbush analysts Daniel Ives and Strecker Backe said in a note on Tuesday that the Nikkei article was “another bullish sign of iPhone 12 demand” and supported the so-called “supercycle thesis” which argues many people with older iPhones re ready for upgrades and will buy the new iPhones.
“Based on lead times on the Apple website as well as our checks, we believe pre-orders tracked more than 2x its predecessor iPhone 11 thus far and is a robust start out of the gates for Cupertino on this flagship supercycle product,” the analysts said.
The analysts estimate that 20% of iPhone upgrades would come from China in the coming year and said that the country is a “key ingredient in Apple’s recipe for success.”
Source: CNBC