According to Rosenblatt analyst Jun Zhang, Apple could further cut iPhone production by an additional 4 million units in the March quarter of 2019. Zhang claims that this will predominantly affect the iPhone XR.
As per Zhang’s estimates, Apple will cut 2.5 million iPhone XR units, 1 million iPhone XS units, and around 500,000 iPhone XS Max units. Apple has not revealed the exact breakdown of how many of each iPhone model it is making. As a result, it’s not clear if this is a disproportionate number of iPhone XRs.
The reason for the reported cuts are concerns about Apple’s success in the China market. The report cites, “China weakness related to the Huawei CFO arrest.” This refers to the recent arrest of Huawei’s chief financial officer, Meng Wanzhou. Wanzhou was detained in Canada, accused of committing fraud by lying about alleged links between Huawei and a shell company that was used to make sales in Iran, thereby breaching U.S. sanctions.
Exactly how Zhang thinks the Huawei arrest will affect Apple isn’t immediately clear. However, he would not be the first analyst to suggest that this could backfire on Apple if the Chinese government retaliates in some how against the arrest of one of its high-ranking business leaders.
This is far from the first time we’ve heard about possible iPhone order cuts, with the iPhone XR regularly singled out. While the number of companies working on Apple’s supply chain makes it difficult to gauge exact orders, multiple suppliers have now been hit by stories of slowing or reduced orders.
We’ll have to wait until 2019, when Apple announces its next quarterly earnings, to get a better idea, however. Not that Apple is reporting exact sales figures these days, of course…
Source: Seeking Alpha
