Samsung and Apple among companies whose production stagnates in 2022

It may be even harder than usual to get your hands on the latest phone this year. Apple and Samsung have joined the ever-growing ranks of tech companies facing slower production this year.

Apple is reportedly aiming for a production target of around 220 million phones in 2022, much the same as in 2021.

Its rival Samsung is going even further to reduce production to 280 million phones against 310 million last year.

Advertising

An industry-wide trend

The major phone companies expecting no growth despite the growing role of technology in everyday life may come as a surprise. However, Apple and Samsung aren’t the only tech giants to slow down this year.

Like many automakers of late, Tesla expects to make far fewer vehicles this year. The company won’t be rolling out any new models in 2022, pushing the Cybertruck release even further.

Image: Cybertruck Owners Club Forums

You can also expect changes from many big tech names. Companies like Meta, Microsoft and Nvidia have all slowed hiring as their spending increases.

Although they may not have announced lowered production targets, it cannot be ruled out that financial problems are just as significant and widespread.

Why tech companies are slowing down

So why are so many tech companies slowing down in 2022? Like most trends, it is the result of several factors. Most notably, the war in Ukraine and ongoing COVID-19 issues are making it difficult to maintain production.

Russia is one of the largest producers of titanium globally and is also a major source of many other valuable minerals. These metals are a crucial ingredient in the semiconductors that power your electronics, and warfare makes them harder to access.

As a result, companies may not obtain enough rare earth metals to meet their lofty production targets without raising prices.

coronavirus outbreak in china
Image: Getty

New rounds of COVID-19 lockdowns in China are also weighing on production. Many electronic components, and even the phones themselves, come from the country. As these lockdowns limit factory capacity, companies like Apple won’t be able to do as much as they would like.

Some companies may be able to make more products but fear they won’t sell them. Rising inflation has caused huge price spikes for big ticket items and groceries.

As these prices keep rising, consumers might rethink their consumption habits. Consequently, there may be less demand for new electronics, so companies reduce their production targets to avoid making more than they can sell.

What does this mean for buyers?

As more tech makers slow down production, it might be harder to find electronics.

This means unfortunate trends like the continued shortage of graphics cards could continue into 2022 and beyond. Phones, tech-driven cars, smart home gadgets and other smart electronics could all face shortages.

In other segments, it could mean higher prices. Producers may have to charge more for the same products to compensate for their higher expenses and lower sales.

These price increases could be as little as a few dollars per item, or they could be enough to keep you second guessing the purchase.

apple logo on glass
Image: Unsplash

The near future is uncertain for tech companies

The demand for technology will not go away in the long run. Current supply issues and inflation will eventually ease, and it will become easier to produce and obtain electronics again.

For now, however, the future of home technology is uncertain.

The duration of the current disruptions or their impact is still up in the air. For now, you can expect higher prices and lower availability for some popular items.

These changes may only last a few months or years, but they will be present to some extent no matter what.

Do you have any thoughts on this? Let us know below in the comments or forward the discussion to our Twitter or facebook.

Editors recommendations:

165fffca2a14d00d8e4cb39a3fa328ce?s=60&d=https%3A%2F%2Fknowtechie.com%2Fwp content%2Fuploads%2F2016%2F02%2Fk logo

Editor at ReHack Magazine with a passion for cybersecurity, AI, and all things tech. Offline, you’ll find me zipping around the neighborhood on my motorbike or gorging on the latest true-crime documentary.

Leave a Comment