According to Nikkei Asian Review, an Asia-focused English-language publication that brings you insights about business, finance, economic and political news, comments and analysis, Apple is set to cut production of its new by iPhones by 10%. Production of the iPhone XR and iPhone XS will be cut over the next three months after Apple made the request to its suppliers prior to the New Year, asking for fewer devices to be produced for 2019’s introductory quarter.
The decision means that this is the second time that Apple have recently cut down on iPhone reduction. Revision of the production applies to all of Apple’s latest iPhones with an unnamed source reportedly telling Nikkei: “The level of revision is different for each supplier and depends on the product mix they supply.”
Understandably, the decision to cut production means that overall production volume of both new and old iPhones will be reduced by approximately 40 to 43 million units for the first quarter of the year. This is down even further from an earlier projection of 47 to 48 million units.
The cut is likely to be down to a number of reasons, including weak iPhone sales in China, cheap battery replacements as well as the effects of the ongoing trade war between the United States and China, with many other factors also accountable. Apple slashed its 2019 Q1 revenue guidance to $84 billion, down by up to $9 billion from the guidance issued just two months ago last November.
Whilst production cuts may help with such issues, it’s likely that they will continue further into the year, however Apple CEO Tim Cook is as optimistic as ever, describing reports suggesting that the iPhone XR has flopped are “bologna” and remains confident that the device is the best selling iPhone to date.