Eyeing weak demand, tech giant Apple has cut production for its iPhone X planned for the current quarter.
The Wall Street Journal reported news on Tuesday (Jan. 30) that production cuts mean that the firm will make 20 million iPhone X devices in the period, half of what had been planned. The financial publication quoted unnamed people “familiar with the matter” and added that component orders had been slashed by 60 percent.
Said an unnamed source: “They always do this when things aren’t selling well. It’s a real headache.” The iPhone X sports features such as facial recognition technology and has a $1,000 price tag, higher than competing devices.
There was no comment from Apple. And there will be a glimpse into the sales flow for the recently debuted devices when the company holds its quarterly earnings report after the bell on Thursday. Looking at total iPhone shipments, which, of course, include the X but also include the 6, 7 and 8 models, analysts see shipments up 1.5 percent for the December quarter.
The halving of planned orders comes as the company was beset with bumps in the manufacturing process, which, as the WSJ noted, spurred Apple to stop using fingerprints as a way of unlocking the phone. Component shortages stymied facial recognition features. The whole line was pushed back to a November debut, with a shortened selling period into the holidays.
In the wake of those events, consumers been buying the older models of iPhones, according to Canalys Analyst Nicole Peng, quoted in the WSJ as stating that those older models, with attendant lower price tags, also have higher margins than the iPhone X. Said the analyst: “Apple doesn’t need to rely on one model to perform very well to be able to achieve the financial results they are aiming at.”