Apple has plans to direct the supplier of the parts needed to produce the three new models of iPhones they will be releasing in 2018 to cut their production by 20%. Nikkei reported yesterday.
According to this report, Apple is planning to play it safe this year. This is due to a couple of reasons.
First of all, their last release, iPhone X, which it seemed they overestimated at $1000, did not quite sell as much as they would have loved it to. They targeted at shipping about a 100 million phones during the October- December quarter but ended up shipping only a total number of 77.31 million phones. Not entirely a disappointing sale but clearly not what they wanted.
Second reason could be due to the decline in consumer’s passion for new editions of iconic smart phones following years of scorching growth. Smartphone users are no longer overly excited when new editions of phones are released and this is causing the demand for smartphones to tighten. Although this development is pushing phone makers to invent more impressive and secure technologies, it has however caused them to release fewer and fewer numbers of their new phones.
A third reason could be due to the increase in competition. More phone makers are releasing phones that have features similar to those found in iPhones and this is eating deep into Apple sales.
Whichever the reason, Atlantic Equities analyst James Cordwell said “At least part of this lower order forecast probably relates to Apple just being a little more realistic ”.
The analyst also said “This news needs to be viewed in the context of Apple probably being overly optimistic last year in relation to the prospects for its new phones. It leaves it with excess inventory in the first part of this year”.
Many analysts, even before this news have already said they expected Apple to make less sales this year.
Other analysts have indicated concerns over the high price of iPhone X.