Apple is reportedly cutting iPhone production by 10% between January and March

Published on: 09 Jan, 2019

Apple Inc. (NASDAQ: APPL) is cutting its current iPhone production by about 10% for the next three months, the Nikkei Asian Review reported on Wednesday.

The Company told its suppliers in December that it would produce fewer new iPhones from its initial expectations for the March quarter, the Nikkei said. This would be the second time in two months that Apple reduced its iPhone production. The newest revision applies to all iPhone models - the XR, XS, and XS Max, Nikkei added.

According to the new proposal, overall production for new and old iPhones would be reduced from 43 million units to 40 million for the March quarter. This would be down from an earlier prediction of 48 million units to 47 million units.

Last week, Apple lowered its guidance on revenues after lower-than-expected iPhone revenue in the Greater China region, as per CNBC. Investors became increasingly wary of a slowdown in the world’s second-largest economy amidst Beijing’s ongoing trade fight with Washington.

Apple and its competitors find themselves in a highly saturated smartphone market with limited opportunities for growth. According to the International Data Corporation, global shipments fell by about 6% in the third quarter of 2018. This would mark the fourth consecutive quarter of year-over-year declines which has caused concern over the market’s future.

Some analysts are worried that smartphones have become so similar in their features and functionality that customers no longer see notable differences, basically, smartphones are not as innovative as they used to be.

Apple’s Chief Executive Officer Tim Cook told CNBC on Tuesday that “naysayers on Wall Street were under-appreciating the Company’s growing ecosystem of devices and services.”

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Nelson Cheng

Email: nelson@financialinsiders.com

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