Apple Cuts New iPhone Production by 30 Percent

Posted on November 19, 2018 by Paul Thurrott in Apple, iOS with 75 Comments

An explosive new report in the Wall Street Journal says that Apple has cut production of all three new iPhones by 30 percent. This news piles on previous reports which had suggested the cuts applied only to the iPhone XR.

Citing multiple sources, the publication says that Apple has cut orders for “all three of the iPhone models that it unveiled in September”—meaning the iPhone XS, iPhone XS Max, and the iPhone XR. As result, the firm has asked component suppliers to reduce production by up to 30 percent.

Apple had originally expected to sell about 70 million iPhones between September and February. So this production reduction suggests that the firm will now sell only about 50 million of the handsets.

The news comes in the wake of multiple reports about specific iPhone suppliers seeing Apple reduce its orders in recent weeks. In the first week of November, Nikkei reported that demand for the iPhone XR was “disappointing,” causing Apple to halt plans to ramp up extra production of the handset. Then, a week later, Lumentum, which supplies FaceID components for the iPhone XS, XS Max, and XR, lowered its profit and revenue forecasts thanks to reduced orders from Apple.

Apple’s market value has plunged this month thanks to these reports: Its market cap is $918 billion at the time of this writing, far below the $1 trillion it had hit in August. But it’s now clear that the consumer electronics giant saw this plunge coming: When it announced its latest quarter earnings statement in October, Apple said that it would no longer report unit sales figures for iPhone, iPad, and the Mac, a key metric for determining how well these products are faring in the market.

As bad, Apple has suffered from a serious decline in product quality over the past few years. And its inability to deliver the products that its customers want—at prices they can afford—is perhaps finally started to have its impact as well.

Given all this, Apple’s decision to raise prices across the board by 20 percent—which I call Apple Jacked—might have come at exactly the wrong time.

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