Concerns Over iPhone 14 Demand Are Unfounded... "Pro Models Face Supply Shortage"

KB Securities Report

On the 7th, when Apple's new iPhone 14 series was officially released in Korea, citizens lined up at the Apple Store in Myeongdong, Jung-gu, Seoul to purchase the product. Photo by Moon Honam munonam@

[Asia Economy Reporter Lee Myunghwan] Amid recent concerns about weak demand for Apple's new iPhone 14 series, securities firms have diagnosed that these concerns are unfounded. This is because the demand for the iPhone 14 has been strong, leading to record-high sales for its partner companies.

On the 8th, KB Securities analyzed, "Foxconn presented a positive outlook for the fourth quarter of this year." Foxconn is Apple's largest partner responsible for producing the iPhone series.

According to KB Securities, Foxconn's September sales announced on the 5th reached an all-time high. Foxconn's September sales increased by 40.4% year-on-year, setting a monthly record. Compared to the previous month, sales rose by 83.2%. KB Securities attributes this record sales performance to the production of the iPhone 14.

Foxconn has presented an optimistic outlook for its fourth-quarter operating conditions. KB Securities analyzes that this is due to a surge in demand for the high-end models (iPhone 14 Pro, Pro Max) despite a decline in shipments of the standard iPhone 14 models and the inflationary environment.

Recently, Apple faced demand controversies after news emerged that it had canceled plans to increase parts production for the iPhone 14 series. However, KB Securities pointed out that this was a temporary phenomenon caused by the delayed launch of the iPhone 14 Plus model, making it difficult to respond promptly to demand with only the standard models. KB Securities also explained that more than 65% of the demand for the iPhone 14 series is concentrated on the high-end models, which has led to supply shortages.

Researcher Kim Dongwon of KB Securities said, "Korean parts suppliers such as Samsung Display, LG Innotek, and BH have an absolute production ratio of over 80% for the high-end iPhone 14 models and are currently working on expanding new production capacity through line conversion in the fourth quarter." He added, "It is estimated that the possibility of upward revisions in the fourth-quarter performance of these parts suppliers has increased, so the recent concerns about iPhone 14 demand are judged to be unfounded."