Apple is Cutting Planned iPhone Production by 10%, Says Report

The news of a 10 percent cut in planned iPhone production comes a week after Apple said it will miss its revenue forecast at the end of 2018.

(Photo: The Quint)

A report by Nikkei Asian Review said Apple is cutting planned production of its latest iPhone models – XS, XS Max and XR – by 10 percent for the next three months. The news is being seen as a sign that the manufacturer is expecting a further hit in iPhone sales this year.

The report comes a week after Apple said it won’t meet its revenue forecast at the end of 2018.

Last month, Apple had asked its suppliers to manufacture fewer iPhones for the January-March quarter, the Nikkei report said, making it the second time in two months that the company had contracted its planned production.

"The level of revision is different for each supplier and depends on the product mix they supply," Nikkei said, citing sources familiar with the matter.

The report also said that overall, Apple will reduce the production of old and new iPhones to about 40-43 million units for the first three months of 2019 (Q1), as opposed to the earlier 47-48 million units.

The difference is substantial, given the 52.21 million units Apple sold in January-March 2018. However, inventory and deviations are not factored in these numbers.

Apple also said that it will stop disclosing iPhone shipments, starting from the October-December quarter this year.

Nikkei cited the decline in the production to a more competitive market and the ongoing US-China trade war. However, most of Apple’s products do not come under the increased tariffs bracket.

"We believe the economic environment in China has been further impacted by rising trade tensions with the United States," the report quoted Apple CEO Tim Cook as telling investors.

(With inputs from Nikkei.)