Apple Cuts Production Orders for 3 New iPhones Models

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Apple’s decision to provide more models has made it hard to estimate the number of handsets and components the company requires

American tech giant Apple Inc has reduced its production orders in the last few weeks for the three new models of iPhone that were launched by the company in September, according to a report in the Wall Street Journal.

A lower demand for the new iPhones models launched recently and the company’s decision to provide more models has made it hard to estimate the number of handsets and components the company requires, said the paper, citing sources.

The investors were shocked when the iPhone maker, a few weeks ago, came out with a lower-than-expected forecast for sales in the Christmas quarter, prompting some of its suppliers to issue warnings, pointing towards weak demand in new iPhone sales.

Lower-than-expected demand

Estimates for iPhone XR sales have been particularly problematic as the American giant cut its production plan by around one-third of the almost 70 million units it had asked some suppliers to produce between September and February.

Last week, the iPhone maker has informed certain suppliers that it has again cut down the production plan for the new iPhone XR model.

Apple has launched its latest iPhone models, the XS and XS Max, in September and the XR model in the month of October.

Revised estimates

Over the last year, investors had majorly been ready to overlook the deteriorating unit sales of iPhones because the average selling prices kept on increasing. However, the American giant is facing severe competition from mid-price range phones from Chinese manufacturers such as Xiaomi.

The buildup of concerns has prompted the analyst to revise their estimates in the past week. Guggenheim Partners predicted a 5 per cent drop in the number of iPhones units sold in 2019. It further said that the company’s reliance on increasing average selling prices was not enough to push growth at a time when the unit sales showing signs of a drop.

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