Apple (AAPL) - Get Report has told several of its suppliers that it plans to make about 213 million iPhones in the twelve months through March 2021, an increase of 4% over the year-ago period, according to a report in the Nikkei Asian Review.
The move is designed to build up inventories of its new 5G phones ahead of possible parts shortages, according to the publication.
Apple recently announced a new entry-level smartphone called the iPhone SE, and production will be split approximately 50-50 between the SE and the new 5G iPhones, according to sources cited by the Nikkei Asian Review.
Most of Apple’s retail stores outside of China remain closed due to the coronavirus pandemic, making it difficult to gauge demand. But the idea behind the production boost seemed to be to ensure that Apple had enough inventory for the holiday shopping season, although some suppliers the Nikkei Asian Review spoke to expressed skepticism that demand would be as strong as Apple expected.
Apple is expected to produce 200 million iPhones in 2020, roughly 10% lower than the estimates before the coronavirus outbreak.
Apple shares were down 1.5% to $272.57 on Tuesday morning and are down about 7% year to date.