Apple has informed its suppliers that it plans to produce approximately 213 million iPhones in the 12 months to March 2021, an increase of 4% over the same period, according to Nikkei.
Apple is expected to build up inventories of its new 5G phones due to concerns over possible component shortages, despite the possibility of falling global demand, the report said.
Apple released new models of its low-end iPhone SE series on April 15. It is also expected to introduce three to four new 5G phones. Shipments for the necessary components have already begun.
Production of current and new models, including the SE and upcoming 5G iPhones, will be split nearly 50-50, Nikkei cited sources as saying.
"Apple's production outlook is pretty bullish, and we will need to assess whether it is based on a realistic demand [forecast]," said one executive at a components maker. "Actual production could be 10% to 20% lower," he said.
Retail store closures have made it hard for Apple to gauge demand for its products. At the moment, most of its sales are online. Apple is therefore gearing up for the year-end shopping season by increasing inventories of new models.
With global smartphone demand likely to slow due to the virus, some parts makers want to gauge Apple's production outlook cautiously.
A display procurement manager said: "Apple may want to adjust inventories so that they have sufficient stocks in the fall and on Christmas."
Apple is expected to turn out roughly 200 million iPhones this year, about 10% fewer than its previous estimate of nearly 220 million phones before the coronavirus outbreak.