Production is anticipated to return to normal by the second quarter after the completion of inventory adjustment.
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Shares of Apple took a leg lower Tuesday on the heels of a report saying the tech giant may significantly slash its iPhone 6S and 6S Plus output.
As inventories of the iPhone 6s and 6s Plus have piled up since they were launched last September, production will be scaled back to let dealers go through their current stock, the business daily reported.
According to analysts at FBR Capital Markets, Apple is expected to sell some 220 million iPhones during 2016, which it describes as a “commendable achievement” for an “s” iPhone cycle, with under-the-skin updates rather than major cosmetic changes.
The Nikkei report triggered concerns about slowing shipments of the iPhone 6s and iPhone 6s Plus handsets; thereby causing Apple’s shared to plunge by almost 2.5 percent.
Apple and Foxconn did not immediately respond to requests for comment.
A source speaking to Fast Company says that, yes, Apple is planning to ship the iPhone 7 without a 3.5mm headphone jack.
In the latter months of 2016, Apple is widely expected to introduce a bigger leap forward with its iPhone 7. Other suppliers such as Japan’s Murata Manufacturing, Alps Electric and TDK Corp dropped between 3 and 4 percent.
However, Moor Insights & Strategy analyst Patrick Moorhead said he was a bit sceptical about the production cut reports.
Apple is scaling back its orders for iPhones, forcing its Chinese suppliers to lay off employees.
Apple will be allegedly reducing orders of the iPhone 6s and iPhone 6s Plus to suppliers by as much as 30 percent this quarter. iPhone 6s and 6s Plus sales are apparently considerably less than that of the iPhone 6 and iPhone 6 Plus in the year-ago quarter.
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Wall Street has also tempered its view on the high-flying stock in recent months.
