The bad news keeps piling on for Apple. Now, Digitimes reports that the firm has ordered a second round of iPhone order reductions from its manufacturers.
“Apple has reportedly enforced a second wave of order reduction in the wake of weaker-than-expected sales for its new iPhones,” the Digitimes report notes. “Many other Taiwan supply chain partners are beginning to feel the pinch in November … An iPhone assembler has also advanced its workforce trimming project, seeking to reduce personnel cost and other expenses to counter the greater-than-expected reduction of orders.”
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Digitimes has a spotty record, for sure. But Apple has been stung by a series of sales setbacks related to the new iPhones—the iPhone XS, XS Max, and XR—none of which have apparently sold as well as Apple or its partners expected. There’s simply too much evidence here to overlook what’s happening.
And there’s more evidence of soft iPhone sales than what we’ve reported so far. Apple is now offering better trade-in deals when customers upgrade to a new iPhone. And the firm dropped the price of the iPhone XR by $100 in Japan.
Apple’s next earnings report will be interesting. The company has already warned that it will not disclose unit sales for the first time. But the language that Tim Cook and other Apple executives use will be very telling. In the past, Apple has always described “record” iPhone sales. This time, they’ll need to search for another success metric, much as Microsoft does in its own vaguely-reported earnings.
dontbe evil
<blockquote><em><a href="#374064">In reply to MikeGalos:</a></em></blockquote><p>we'll how long they can keep selling overpriced and underfeatured devices … they're pushing too much… even if apple fans are so blind to be milked there is a limit</p>
dontbe evil
<blockquote><em><a href="#374122">In reply to MikeGalos:</a></em></blockquote><p>it's called COURAGE</p>
dontbe evil
<blockquote><em><a href="#374065">In reply to glenn8878:</a></em></blockquote><p>OLED is "premium" only on apple overpriced devices… many other devices have OLED for ages for lower prices</p>
PeterC
<p>The question, if there is one, is which territory/region(s) are sales "potentially" declining in, its not across the board sales declines. iphones, like any branded phone, are cheaper in some regions/countrys than they are in others. Some regions are expensive, some not when compared to others. </p><p><br></p><p>Its my understanding that iphones are cheapest in the US, Canada and Japan. China was once kinda break even point (not any more) and Europe is more expensive but India is the most expensive. The Indian Rupee has lost quite a bit of value against the dollar this year and India is MASSIVE growth market for apple in terms of potential new customers – but not at these forex rates. So projected sales here will suffer from foreign exchange fluctuations. The same issues apply to China now too … in another market where Huawei et al, can pop a cheap phone out at will to a HUGE market, without the foreign exchange currency issues.</p><p><br></p><p>Apple iPhone supplier cutbacks are in part some market saturation, like Japan?, but they most surely tracking these global currency and trade issues. apples problems arn't really sales declines caused by a lack of interest/desire/want/need etc etc ….. they're more a result of, well, your countries political and trade strategy affecting currency valuations and product prices around the world. I'll duck behind my sofa now and see how many downvotes I can accumulate. BUT, have a think people, just take a breath and have a think about <em>cause and effect</em>. Apples production cuts are an effect of currency issues hurting projected sales in the biggest markets of India and China …. </p><p><br></p><p>apple bashing is fun for some, I get that, but i'd suggest people take a moment to think about what is causing apples and other US brands problem, it may be a little uncomfortable once you see it…. But hey weve got Brexit over here and that's even more bizarre!!</p><p><br></p><p>Anyways, roll on Q1 and lets see what revenue apple posts. If its a drop is it a declining brand champion or a result of shall we say, national decision making…. but more importantly which region posts sales declines and how did currency fluctuations play into that region?</p><p><br></p><p>(oh and its most certainly affecting other US brands too, loads of them) Right ive put my crash helmet on. Ready.</p>
provision l-3
<p>Just so I understand the narrative being pushed:</p><p><br></p><ol><li>Apple stopped reporting unit numbers to hide that unit sales are going down. </li><li>Apple raised prices to meet revenue expectations in the face of declining sales. </li></ol><p><br></p><p>I think I got that right?</p><p><br></p><p>So now Apple has not one but two production cuts because the products aren't selling as well as Apple had expected. Apple's guidance for the current quarter is minimum of 89 billion revenue. Apple hasn't re-issued guidance or issue a profit warning for the current quarter. This is particularly odd given that unit sales are falling and the new higher prices products have failed to sell as well as projected. </p><p><br></p><p>I'm curious how Paul squares these two things? Does he think there is a sleeper hit product in Apple's line up? Does he think Apple leadership is unaware of these sales shortfalls? Maybe he thinks Apple leadership is risking SEC violations in hopes that the quarter will turn in the final few weeks? Maybe he thinks they plan to just lie and say they met their quarterly guidance? </p>
provision l-3
<blockquote><em><a href="#374113">In reply to MikeGalos:</a></em></blockquote><p>That first paragraph doesn't make much sense nor is it even based in fact. Apple suppliers are cutting production even though demand is as expected? Also, 4-5 suppliers of Apple's 200+ have announced a material impact. I am not sure where you got "every Apple supplier".</p><p><br></p><p>You are correct that Apple isn't bound to report guidance daily. They are obligated to issue a warning when they know they will miss their guidance for the quarter. On the 19th Paul reported that the new phone production was cut by 30%. So this cut would be on top of a 30% cut. That seems like more than gradually coming up short. </p><p><br></p><p>Anyway, it sounds like you are going with a mix of Apple is just in denial about the massive cuts they made or they being intentionally dishonest theories.</p>
provision l-3
<blockquote><em><a href="#374293">In reply to MikeGalos:</a></em></blockquote><p>I admittedly don't read every Apple related thing on the web. So have I missed where anyone has argued for believing the supply chain rumors about order cuts while arguing they should also be dismissed. </p>