Apple said to boost iPhone production by as much as 20% following last year’s 5G super cycle

Apple is asking suppliers to ramp up production of its next-generation iPhones by 20%, according to Bloomberg. The stark increase from its 2020 production numbers comes despite last year being what the phone maker considered to be a “super cycle,” driven by new 5G models that offered consumers access to the improved, faster wireless networks offered by carriers.

Apple stock was up nearly 2% in the premarket Wednesday.

Apple has maintained a production level of about 75 million devices from the product’s launch to the end of the year, Bloomberg reported, citing people familiar with the matter. Now, the company reportedly is seeking as many as 90 million of its new iPhones. According to the report, the actual number produced could be a few million units shy of the target.

An Apple spokesperson wasn’t immediately available to comment on the report.

Meanwhile, in a note to investors Wednesday, Credit Suisse analysts said 5G will continue to drive upgrades as carriers expand their footprint of the new faster networks around the world and there are more reasons for regular consumers, as opposed to just early adopters, to buy an iPhone with 5G.

Credit Suisse said it expects iPhone sales of 234 million units this year, 237 million units in 2022 and 249 million units in 2023. Apple stopped reporting iPhone unit sales, but reported $47.94 billion in iPhone revenue in its fiscal Q2 earnings, up 65.5% year-over-year.

“We have seen good momentum in the iPhone 12 cycle with a richer mix along with unit growth off a lower base,” Credit Suisse analysts said in the note. “We remain bullish on 5G as a catalyst for iPhone upgrades over time, but believe the momentum will likely slow from here with focus shifting from early adopters skewing towards Pro models to mainstream penetration within Apple’s >1 bn iPhone user base as 5G coverage and use cases mature.”

The analysts said this year’s new iPhones will likely offer evolutionary upgrades over the 2020 model, like improved displays, cameras and processors, but that long-term changes to the iPhone, like an eventual foldable design and a larger screen on a more affordable 5G iPhone SE model will help continue to drive new iPhone purchases.

Read the full Bloomberg report here.