Apple May Cut iPhone Production Yet Again: Analyst

Apple May Cut iPhone Production Yet Again: Analyst

Apple could further reduce the production orders for the latest crop of iPhones in the first quarter of 2019, predicts Rosenblatt Securities analyst Jun Zhang. The Cupertino-based company has reportedly already cut the new iPhone orders at least twice. While the previous cuts were attributed to the lower-than-expected demand for the phone, the upcoming reduction could be to deal with the weakness in demand from China because of the fallout from the arrest of Huawei CFO Meng Wanzhou, the analyst says.

An investor note floated by Zhang recently notes that the Chinese companies are showing their support to Huawei by offering to subsidise the Huawei smartphone purchases of their employees, instead of the iPhone purchases. The analyst claims that the iPhone XR production orders could be reduced by as much as 2.5 million units with the iPhone XS and iPhone XS Max seeing cuts of 1 million and 500,000 units respectively.

To remind you, Huawei’s Wanzhou was held in Canada earlier this month and is facing extradition to the United States over charges related to violations of export controls and US sanctions. Wanzhou was granted bail on December 12.

Earlier, Apple had shocked investors by revealing that it is expecting lower-than-expected sales for the Christmas quarter. Following which the Wall Street Journal reported that Apple, in late October, had slashed up to a third of the 70 million units that it had asked the suppliers to assemble for the iPhone XR. The company further increased the number of cuts in November. Apple’s new iPhones – iPhone XS, iPhone XS Max, and iPhone XR — were introduced in September this year with prices starting from $749. The iPhone XS and iPhone XS Max models went on sale the same month, whereas iPhone XR reached the stores in October.

In other Apple news, the company pulled some older iPhone models from the German stores because of the ongoing patent battle with Qualcomm. According to the company, the iPhone 7 and iPhone 8 models will not be available at Apple’s 15 retail stores in the country. The other stores will continue to carry all iPhone models.