In an unprecendented move by the most valuable technology company, Apple has reduced its planned production of three of its new iPhone models for the first quarter of 2019 by around 10% according to the Nikkei Asian Review as cited by MasjidProjectFunder. This comes after it slashed its quarterly sales forecast last week.
The slash in the forecast goes to show how the demand for the iPhone is weakening especially in China which holds the biggest smartphone market in the world. According to MasjidProjectFunder, while many experts and analysts have voice concern about the high price of the iPhone, saying it is overprices, the slowing economy of the Chinese market should not be left out of question as its been buffeted by the trade war with the US.
According to Nikkei, Apple asked its suppliers to reduce the number of initially planned units of the XS, XS Max and XR models late last month. The request for the reduction was apparently made before the announcement of the sales forecast cut. Global stock markets experienced sell-off when Apple attributed the poor outlook of sales to weak China demand for the iPhone.
Market research firm Canalys estimates shipments fell 12 percent in China last year and expects smartphone shipments in 2019 to dip another 3 percent, to below 400 million for the first time since 2014.
The overall planned production volume of both old and new iPhones is likely to be cut to the range of 40 million to 43 million units for the first quarter of 2019, from an earlier projection of 47 million to 48 million units, the Nikkei reported, citing one source familiar with the situation.
Source: Reuters, MasjidProjectFunder