According to emerging reports, Apple has officially cut production orders for its flagship iPhone. And not one model, but all three new models announced in September, according to Wall Street Journal reports.
The issue seems to be lower than expected demand for the new generations of iPhones combined with three different models all hitting the market at once, making it difficult to predict the number of components and handsets that will be necessary to satisfy consumer demand. The reported production cut follows an earnings report that saw Apple disappoint its investors and offer up a lower than expected sales forecast for Q4, generally its strongest sales period of the year. That forecast led some to speculate on the possibility of weaker than expected iPhone sales.
iPhone XR seems to be the model with the biggest struggle, with Apple cutting its production by as much as a third of the nearly 70 million units some suppliers had been asked to produce between September and February. Suppliers in the last week have been informed that the plans have since changed and have been revised down, a lot.
The company started selling its latest phone generation, the iPhone XS and XS Max, in September, and the XR model in October.
As of this writing, Apple has offered no official comment on the reports.
The newest reports are the latest in a steady drumbeat of production woes that have been coming out of Apple in fall 2018. Suppliers of iPhone components began to feel tremblings of a lower than expected run for the iPone — particularly the XR — as reports circulated that Apple has reportedly told Pegatron and Foxconn to stop plans for more production lines for iPhone XR in a bid to call off a production boost for the phone.
Apple suppliers have also felt the bite of investor concerns over Apple — as Apple’s share price has declined in the last several weeks, its suppliers’ stock prices have been along for the ride.
Is Apple looking at its first less than merry Christmas in the decade-plus history of the iPhone?
We’ll keep you posted.