Apple cuts production for all three new iPhone models

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Apple has reportedly cut production of its new iPhones by 10 percent.
Photo: Apple

Apple has cut its current iPhone production by around 10 percent for the first three months of 2019, a new report claims. This follows Apple’s recent note to investors revealing that declining iPhone sales are causing it to miss its own earnings guidance for the first time in 16 years.

According to Nikkei Asian Review, this is the second time in two months that Apple has cut planned production for the iPhone. The cuts reportedly apply to all three new iPhone models, including the iPhone XR, iPhone XS, and XS Max. “The level of revision is different for each supplier and depends on the product mix they supply,” one of the publication’s sources is quoted as saying.

Apple made the request to its suppliers shortly before it issued its revised earnings guidance.

In total, the revised plan for all iPhones (including older models) will be reduced from an earlier projection of 47-48 million to 40-43 million units. This would, in theory, be a 20+ percent reduction from the 52.21 million units that Apple sold this quarter last year.

However, numbers could be different due to on-hand inventory and the number of these manufactured units that Apple is actually able to sell.

Unsurprisingly, Apple’s suppliers have been hit hard by the falling iPhone demand. While the iPhone has been a seemingly unstoppable growth engine for these companies for years, the supply chain is now experiencing the same sales drop that Apple is.

Camera lens maker Largan Precision says that its December sales fell 20 percent from November, making it the company’s worst December since 2013. Metal case supplier Catcher Technologies, which works on the XR and a small number of XS Max cases, meanwhile experienced a 28 percent decline in revenue versus the same month last year.

“We expect the market conditions at the end of 2018 will continue into 2019,” Catcher told investors, describing a demand outlook that is “highly uncertain and volatile.”