Apple slashes iPhone production

People look at iPhones at the World Trade Center Apple Store during a Black Friday sales event in Manhattan New York City US

Apple, which slashed its quarterly sales forecast last week, has reduced planned production for its three new iPhone models by about 10 percent for the January-March quarter, the Nikkei Asian Review reported on Wednesday.

The request was made before Apple cut its forecast last week, Nikkei said. "We believe the economic environment in China has been further impacted by rising trade tensions with the United States". Sources say that Apple contacted suppliers last month, telling them to produce fewer iPhones for the current quarter. But if even "affordable" iPhone models like the XR are retailing for £749 / $749 (AU$1,229), with flagship models pushing into four-figure sums, Apple may be testing the determination of its fan base a bit too hard.

A different source told the publication the revised plan reduces iPhone production volume to about 40 million to 43 million units from 47 million to 48 million units for the first quarter.

Apple did not immediately respond to a Reuters request for comment.

Apple's iPhone suppliers include Taiwanese assemblers Hon Hai Precision Industry (Foxconn) and Pegatron. Foxconn is said to collect almost 80 percent of its revenue from Apple products, and it's clear that since both Apple component suppliers (who would be selling to Foxconn) and Apple itself slashed forecasts that lagging iPhone sales are to blame here. Cupertino probably decided on that initial goal based on previous sales, seeing as it sold 52.21 million units within the same period past year.

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