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Apple’s staffing and spending cuts should not affect production plans

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It was recently reported that Apple plans to slow the hiring and spending of some teams next year in response to an economic downturn. Now, analyst Ming Chi Kuo’ has clarified that this should not affect the company’s production plans.

Apple cuts spending, but it shouldn’t affect production

Kuo states that his latest checks show that there have been no significant changes to Apple’s hardware development plans for 2023. In fact, the situation looks almost unchanged with regard to the next 18-24 months of supply. The information suggests that while Apple may take a more cautious approach when it comes to spending and hiring, it’s still full steam ahead with its hardware plans for the foreseeable future. This is consistent with Bloomberg’s recent report, which listed the company’s plans for an “aggressive product launch schedule” next year. The main product expected to arrive within the next 12 months is Apple’s first mixed reality headset.

While it won’t be positioned as a mainstream device, mainly due to its high price tag and focus on VR capabilities, the headset will be the culmination of years of research and development. It should also mark a new phase for Apple, with the end goal of producing more affordable AR glasses that the industry (and maybe even Apple) sees as a potential future iPhone replacement.

Apple wants to reduce headcount and spending for some teams

While it’s unclear which teams will be directly impacted by Apple’s more cautious spending plans, Bloomberg reported that the company is giving some divisions lower-than-expected budgets for next year. The main consequences of this include a refusal to increase the workforce for certain groups next year, compared to the usual trend of adding between 5% and 10% more employees.

Other teams remain without replacements for departing employees. On the upside, Apple is reportedly planning a larger compensation budget to pay higher salaries for employees and maintain a competitive edge in an increasingly tight job market.

Many products will arrive at the end of 2022

As the focus shifts more and more to next year, Apple is planning a huge range of new products to hit the market by the end of 2022. These include three new Apple Watch models, one of which could cost as much as an iPhone, redesigned MacBooks, and a new Apple TV.

Of course, the biggest arrival will be that of the iPhone 14. Ming-Chi Kuo reported earlier today that there are supply chain issues related to memory chips and display panels. However, the overall effect on production must be limited.

The current expectation is that the demand for the iPhone 14 will outpace that of iPhone 13, which in turn was higher than the demand for iPhone 12. The main reason for this seems to be Apple’s decision to ditch the mini model. Instead, the company will introduce a new 6.7-inch iPhone 14 Max variant aimed at customers looking for a larger device on a slightly tighter budget. Essentially those who are not willing to buy an iPhone 14 Pro Max. The demand for such a device has been apparent for quite some time, with the iPhone 13 Pro Max consistently outperforming the smaller Pro model. But in China, demand could be even more exaggerated. The iPhone 14 and iPhone 14 Pro lineups are slated for mid-September, with a release a few weeks later. A price hike is expected, which could push the iPhone 14 to $899 and the iPhone 14 Pro to $1,099, with the Max variants costing an additional $100.

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