Apple services will compensate for the drop in iPhone production

With supply chain difficulties and the war in Ukraine, Apple seems determined to reduce iPhone orders in the coming months. However, the company’s services should compensate for the losses.

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Loop Capital analyst John Donovan said Apple will cut iPhone production by an additional 9 million units in 2022, both due to component shortages and the global geopolitical situation. The iPhone SE 2022 should bear the brunt of this, but the iPhone 13 could also suffer a drop in orders compared to what was expected a few weeks ago. The situation should only return to normal with the launch of the iPhone 14 in the fall, given that the production forecast remains unchanged.

Despite this situation, the losses for Apple will be more than offset by the great success of services like Apple Music, Apple TV+ and iCloud, which have been growing steadily for months now. These services not only bring significant revenue, but also retain iPhone users, who may update their smartphones more slowly, but continue to pay for the various subscriptions.

Among others, the strongest growth in recent months has been recorded by Apple Music, iCloud, but also by Apple Arcade and Apple Fitness+. On the other hand, Apple News is struggling to take off, the service is currently only available in a few countries.

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