iPhone 1H26 Production Forecast Update: Memory Price Hike Expectations Drive Pre-builds

We maintain our overall iPhone production forecast at approximately 247–249 million units for the full year of 2025. However, for the first half of 2026 (1H26), we observe several key adjustments driven by supply chain cost expectations and product strategy:

1. Memory Price Expectations Trigger Strategic Stockpiling Looking ahead to 1H26, iPhone production volumes are expected to be higher than previously projected. This increase is primarily driven by the anticipation of a memory price hike in the second half of 2026 (2H26). To hedge against these rising costs, Apple plans to build up inventory for the iPhone 17 series in advance during the second quarter of 2026 (2Q26), elevating overall production levels for the first half of the year.

2. 1Q26 Forecast Upward Adjustment and Strong YoY Growth For the first quarter of 2026, we have slightly adjusted production forecasts upward for the iPhone 17 and iPhone 17 Pro Max. Driven by this adjustment, total production for the quarter is estimated to show a significant Year-over-Year (YoY) increase of approximately 13% to 18%.

3. New Model Mass Production and Legacy Model Phase-out (EOL) Regarding the product mix and transition timeline:

• iPhone 17e: Expected to enter mass production at Foxconn in January 2026, with a build plan of approximately 7–9 million units for 1H26.
• iPhone 16e: Production is expected to continue.
• Legacy Models: In the lower-end segment, the iPhone 13 and iPhone 14 are scheduled to reach End-of-Life (EOL) in 2Q26 and will gradually exit the market.

Summary: The production strategy for 1H26 is characterized by aggressive inventory preparation and generational transition. The primary focus is on pre-building the iPhone 17 series to mitigate component cost pressures expected in the second half of the year, while simultaneously refreshing the mid-to-low-end lineup with the launch of the iPhone 17e.