Apple cuts production plans for first quarter

TOKYO – Reuters

Apple Inc, 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 Jan. 9.

That rare forecast cut exposed weakening iPhone demand in China, the world’s biggest smartphone market, where a slowing economy has also been buffeted by a trade war with the United States.

Many analysts and consumers have said the new iPhones are overpriced.

Apple asked its suppliers late last month to produce fewer-than-planned units of its XS, XS Max and XR models, the Nikkei reported, citing sources with knowledge of the request.

The request was made before Apple announced its forecast cut, the Nikkei said. The bleaker sales outlook, which Apple attributed to weak China demand, triggered a broad sell-off in global stock markets.

Market research firm Canalys estimates shipments fell 12 percent in China last year and expects smartphone shipments in 2019 to dip another 3 percent, to below 400 million for the first time since 2014.

Overall planned production volume of both old and new iPhones is likely to be cut to a range of 40 million to 43 million units for January-March, from an earlier projection of 47 million to 48 million units, the Nikkei reported, citing one source familiar with the situation.

The report comes after chip suppliers Samsung Electronics and Skyworks Solutions flagged weak first-quarter chip demand for smartphones.

As Chinese demand has faltered, Apple has increased focus on India, which recently overtook the United States as the world’s second-largest smartphone market.