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Apple to maintain current iPhone production as competitors gain momentum

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Dan Howley, Yahoo Finance’s tech editor, is discussing Apple’s iPhone production plans and tech giants raising wages to stave trade unions.

Video transcript

Dave Briggs: Well, it’s a big day at Apple News. It costs more for employees, but less for consumers. Apple will reportedly build the same number of iPhones in 2022 as last year, or about 20 million less than analysts expected. Dan Howley is up to date and here. Dan, let’s start with why they are less. Is it a supply chain issue? Are you short of tips? Is it something completely different?

DAN HOWLEY: Yeah, it’s probably related to those combinations, right? Supply chain and inflation. Obviously, as inflation rises, people are less likely to spend $ 1,000 on smartphones. Maybe they will hold it for another year. But keep in mind that there were these blockades in China. According to Apple, this will hurt revenue for the next quarter, the current quarter, by $ 4 to $ 8 billion. So what we are seeing is a combination of that and what some of this problem is happening with inflation.

So I think that’s where we’re getting that 20 million number. Keep in mind, however, that this does not mean that the next iPhone as a whole is basically kaput. The next iPhone will be available from September, usually from January, until the fiscal year. So I think the iPhone will continue until 2023. And as long as inflation continues, production may change if there is any difference in the type of economy at that point.

So I don’t think that number necessarily indicates that it’s particularly bad for this phone. I think the economy has many problems now. As long as inflation goes into their own spending, people are tackling many of their own private problems. So, I think this 20 million number will come out.

SEANA SMITH: And when it comes to inflation, Dan has seen some companies being forced or pressured to raise wages. Well, Apple, I don’t know if they were under pressure, but it’s coming out saying that Apple is actually going to pay more to its employees. What do you think of the move?

DAN HOWLEY: Yeah, I think this is basically a way for employees to almost succumb to the pressure they put on them in both Apple stores and corporate offices, right? Apple is obliged to return to the office three days a week. You have to be in the office. Many employees pushed it back. Apple is usually pretty quiet when it comes to employees, especially on the actual Apple Park side, Apple headquarters side, when it comes to all sorts of rumblings. So it’s clearly a problem to hear that kind of rumbling about the three days of work that week.

And you have people in the Apple Store who are actually trying to unite. And that’s a bigger issue that Apple is currently working on. And they’re trying to keep it down-no, no, we’ll give you more money and hold it down a bit. It’s not a big boost, but it’s a boost. But it’s not always clear if it will stop talking about any kind of union. There are reports-Apple is trying to push it down, trying to get managers to see employees, trying to say, see, if you come in, you can get a good profit There are reports that it won’t be possible unions, along those lines.

Dave Briggs: Yes, Apple is expensive and the working conditions are relatively good in the industry. The union really whispered at retail stores.

DAN HOWLEY: Well, it was compared to the number of stores they have. But the fact that it’s happening is very important. Because it’s not like working at Best Buy, it’s like this faceless business entity. When You Work-At least for many people working at Apple stores I’ve talked to or know about, it’s a kind of career path for them. So that’s not what you usually hear from Apple in that regard. So I think the story of the union is definitely noteworthy.

Dave Briggs: Okay, Dan Howley. Thank you. appreciate.

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