Shares of Apple (NASDAQ: AAPL) dipped in pre-market trading Wednesday morning following multiple reports that the company has decreased orders of the iPhone during the past few months.
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There does appear to be some truth to these claims considering that Foxconn, Apple’s primarily iPhone manufacturer, has received a $12 million grant from the Chinese government to minimize layoffs at its massive facilities.
According to a Nikkei report, tech giant Apple will likely slash the production of its newest iPhone models – iPhone 6s and iPhone 6s Plus – by almost 30 percent in the first quarter of 2016.
High iPhone stock levels are prompting Apple to cut production of the 6s and 6s Plus by 30 percent between January and March, according to the news site.
Reports of slowing shipments and mounting inventories of the iPhone 6S and 6S Plus, as well as tepid forecasts from suppliers, have pushed Apple investors into unfamiliar territory after years of booming sales and surging shares.
That sentiment was echoed by the Nikkei Asian Review, which noted that “Apple’s products and brand have not lost their appeal, and older models have continued to sell”.
“Businesses need to prepare for a potential year-on-year decline in iPhone output for 2016 as a whole”, said Yasuo Nakane, a senior analyst at Mizuho Securities.
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KitGuru Says: A lot of supply companies in China rely on Apple’s business so a drop in production like this can have some long-reaching consequences.
