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Apple cuts 1Q production for new iPhones by 10 pct

10 January 2019

Apple is having a hard time selling iPhones to the consumers and even with new features, the company is unable to sell them.

Rumor has it that Apple is scaling back its production plans for its most recent fleet of handsets - the iPhone XS, iPhone XS Max, and iPhone XR - by around 10%. "We did not foresee the magnitude of the economic deceleration, particularly in greater China", Apple CEO Tim Cook said in a letter to investors when announcing the cut in revenue forecast. The bleaker sales outlook, which Apple attributed to weak China demand, triggered a broad sell-off in global stock markets. This figure is derived from sources apparently familiar with this request, and applies to the first 3 months of 2019. The report indicates that Apple is going to reduce production from 43 million units to 40 million iPhones.

Apple did not respond to a Reuters request for comment.

Apple's iPhone suppliers include Taiwanese assemblers Hon Hai Precision Industry Co Ltd (Foxconn) and Pegatron Corp.

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There was little reaction to the report among shares of major Apple suppliers, as the market has already digested production cuts after the iPhone maker's forecast cut, analysts said. Apple shares were up 1.3 percent at $152.70 in early trading on Wednesday. Cupertino probably decided on that initial goal based on previous sales, seeing as it sold 52.21 million units within the same period past year.

As Chinese demand has faltered, Apple has increased focus on India, which recently overtook the United States as the world's second-largest smartphone market.

On top of it all, last month Apple was also ordered by the Fuzhou Intermediate People's Court to stop selling and importing all iPhone models from the 6s to the X in China after concluding that Cupertino was infringing on two Qualcomm patents.

Apple cuts 1Q production for new iPhones by 10 pct