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Apple plans to make 20% fewer new model iPhones this year: Report

Apple’s reported production cut adds to concerns of weakening smartphone sales after years of scorching growth as sales stagnate in key growth markets such as China and users upgrade their phones less often.

business Updated: Jun 08, 2018 18:26 IST
Reuters
Reuters
Reuters
Apple,iPhone,iPhone demand
Apple’s stock has added more than $200 billion in the past year, but demand for the iPhone X has underwhelmed investors.(AFP Photo)

Apple Inc expects to ship 80 million new model iPhones this year, down 20% from what it had planned at the same time last year, the Nikkei Asian Review reported on Friday, citing industry sources.

The California-based firm has asked its parts suppliers to make about 20% fewer components for the three new iPhones it plans to launch in the second half of 2018, compared to last year’s plans for its iPhone X and iPhone 8 models, the paper reported.

The report adds to concerns of weakening smartphone sales after years of scorching growth as sales stagnate in key growth markets such as China and users upgrade their phones less often.

It knocked 2% off Apple’s shares and send stocks of its suppliers around the world as much as 6 percent lower, weighing on the US and other stock markets.

“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,” one of the four sources, who is in the supply chain, told the Nikkei Asian Review.

“For the three new models specifically, the total planned capacity could be up to 20% fewer than last year’s orders.”

Many analysts have said the high price of the iPhone X - which sells for $1,000 and is the first iPhone to sport a new design since the launch of the iPhone 6 in 2015 - is also muting demand for the flagship.

Top Apple analyst Ming-Chi Kuo said earlier this week that Apple might cut prices of new iPhones to debut later this year by as much as $300, according to several media reports.

Kuo said that Apple was likely to launch a 6.5-inch OLED “IPhone X Plus,” a second generation of iPhone X and an iPhone with a 6.1 inch screen.

Apple’s stock has added more than $200 billion in the past year, but demand for the iPhone X has underwhelmed investors.

DA Davidson & Co analyst Thomas Forte, however, played down the concerns.

“I am not overly concerned ... about the lower supply speculations. Apple is doing enough in general to keep the ball moving forward,” Forte said.

Shares of Apple suppliers AMS fell 6%, while those of Dialog Semi fell 4.1% US-based suppliers Advanced Micro Devices, Micron Technology Intel, Broadcom Inc and Qualcomm Inc were all down between 1% and 3%.

Apple did not immediately respond to a request for comment.

First Published: Jun 08, 2018 18:25 IST