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Apple Tells Suppliers to Cut iPhone XR and XS Production by 10% for Next Three Months
Apple is telling its suppliers to cut production on new iPhones by 10 percent over the course of the next three months, reports Nikkei.
Apple made the request of its suppliers late last month, asking them to produce fewer iPhones for the January-March quarter.
This is the second time that Apple has recently cut down on iPhone production, and Nikkei says Apple made the decision prior to issuing its guidance downgrade last week.
The production revision applies to all of Apple's new iPhone models, including the iPhone XS, XS Max, and XR. "The level of revision is different for each supplier and depends on the product mix they supply," an unnamed source told Nikkei.
A second source said that overall production volume of both new and old iPhones will be reduced by approximately 40 to 43 million units for the January-March quarter, down from an earlier projection of 47 to 48 million units.
Due to weak iPhone sales in China, the effects of the U.S.-China trade war, cheap battery replacements, and other factors, Apple cut its Q1 2019 revenue guidance to $84 billion, down from the $89 to $93 billion guidance issued in November, and with the production cuts, those issues may continue further into the year.
Apple CEO Tim Cook just today said, however, that reports suggesting the iPhone XR is a flop or selling poorly are "bologna," and that the device has been the best selling iPhone every day since it launched.
Apple made the request of its suppliers late last month, asking them to produce fewer iPhones for the January-March quarter.
This is the second time that Apple has recently cut down on iPhone production, and Nikkei says Apple made the decision prior to issuing its guidance downgrade last week.
The production revision applies to all of Apple's new iPhone models, including the iPhone XS, XS Max, and XR. "The level of revision is different for each supplier and depends on the product mix they supply," an unnamed source told Nikkei.
A second source said that overall production volume of both new and old iPhones will be reduced by approximately 40 to 43 million units for the January-March quarter, down from an earlier projection of 47 to 48 million units.
Due to weak iPhone sales in China, the effects of the U.S.-China trade war, cheap battery replacements, and other factors, Apple cut its Q1 2019 revenue guidance to $84 billion, down from the $89 to $93 billion guidance issued in November, and with the production cuts, those issues may continue further into the year.
Apple CEO Tim Cook just today said, however, that reports suggesting the iPhone XR is a flop or selling poorly are "bologna," and that the device has been the best selling iPhone every day since it launched.
Tag: nikkei.com
Buyer's Guide: iPhone XS (Neutral), iPhone XR (Neutral)
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10 weeks ago
Dun dun dun!
What's next on the "What can Tim do next?" show?
10 weeks ago
Cutting production after the holiday shopping season is something the Apple has done every single year. It is neither surprising nor unexpected. Not sure why this appears to be some new strategy by Apple.
This isn't talking about scheduled production cuts. This report is saying an additional 10% cut more than was already planned.
10 weeks ago
I don't think Tim Cook is the right person for an Apple innovational rebound. If you want someone to produce strong financial results and please shareholders? Tim Cook is your guy. If you want someone who can pioneer an iPhone rebound, revitalize Siri, not demonstrate yesteryear Apple hubris, and be bold? Then Tim Cook isn't your guy.
I am not going to say pre-Jobs or post-Jobs arguments here. I am just going to critique Cook's tenure:
iOS 11 and its buggy fiasco, Siri being unshackled up a bit occurred way after the Google Assistant started its major strides, AirPower not even being out, iPad Pro and iPhone bending, lack of innovations w/ the iOS beyond being a touchscreen based environment, stagnant Mac products, etc.
I think Apple needs to understand that its "differentiation" is not going to work on branding alone. When you can get better features, good enough software, and more value from your purchases at a fraction of the price? You're probably leaning towards the more affordable product.
China is the most populous nation on the planet. Apple can still appease and entice their customers without resorting to Moto G pricing and products. To disrupt a mature market? It requires bold thinking and risk taking.
You have a processor capable of powering a laptop, but you have the OS that has UI elements since iOS 7 and the functionality of generations old Android software. Why, why, why?
I am not going to say pre-Jobs or post-Jobs arguments here. I am just going to critique Cook's tenure:
iOS 11 and its buggy fiasco, Siri being unshackled up a bit occurred way after the Google Assistant started its major strides, AirPower not even being out, iPad Pro and iPhone bending, lack of innovations w/ the iOS beyond being a touchscreen based environment, stagnant Mac products, etc.
I think Apple needs to understand that its "differentiation" is not going to work on branding alone. When you can get better features, good enough software, and more value from your purchases at a fraction of the price? You're probably leaning towards the more affordable product.
China is the most populous nation on the planet. Apple can still appease and entice their customers without resorting to Moto G pricing and products. To disrupt a mature market? It requires bold thinking and risk taking.
You have a processor capable of powering a laptop, but you have the OS that has UI elements since iOS 7 and the functionality of generations old Android software. Why, why, why?
10 weeks ago
Tim's strategy is to keep raising prices to offset losses. Brilliant idea.....
10 weeks ago
Nikkei is about as unreliable as it gets, but it’s not like a production cut after Xmas wouldn’t make sense.
Seems the iPhone did well everywhere except China.
Apple needs an “emerging markets” phone.
Yes, that's right fake news. iPads don't bend it's the tables they are on that are bent in photos. Siri isn't bad, it's that all AI's are confused by multiple zip codes.
10 weeks ago
I don’t trust Tim or anything coming out of Apple anymore after them telling customers iPad bending is normal
10 weeks ago
Isn’t production usually cut as the year goes on, especially after Christmas?
10 weeks ago
Am i'm the only one that is happy to see that apple is taking a beating?
Don't get me wrong! I have every Apple product but this year for example i didn't replace my MacBook Pro, the iPad or the iPhone! It's not worth it.
Can't sell an iPad that bends and tell that is normal.
Or the same iPhone like last year with a small bump in specs and pretend that iPhone X didn't exists!
Can't push updates to devices that bricks them! Like they did last year with apple watch first series and iPhones!
And the list can go on!
Apple needs to wake up! Soon!
Don't get me wrong! I have every Apple product but this year for example i didn't replace my MacBook Pro, the iPad or the iPhone! It's not worth it.
Can't sell an iPad that bends and tell that is normal.
Or the same iPhone like last year with a small bump in specs and pretend that iPhone X didn't exists!
Can't push updates to devices that bricks them! Like they did last year with apple watch first series and iPhones!
And the list can go on!
Apple needs to wake up! Soon!
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