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.
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It remains to be seen though how much of a decline Apple witnesses in iPhone sales this year, and whether that’s due to its competitors gaining its customers to simply saturated demand in the high-end segment of the market, analysts appear to think it’s the latter. As a result, job cuts have occurred at the factories responsible for building the iPhones and some investors haven’t been too happy with the news, with shares dropping by around 2.5 percent. The shares in the Asian makers of the iPhone screens and chips were also cut down on Wednesday. What’s more, the provincial government is giving the company formally known as Hon Hai more than $12 million in subsidies to limit any layoffs.
Other suppliers such as Japan’s Murata Manufacturing Company, Alps Electric Company and TDK Corporation fell by 3% or 4%. Production is expected to resume at full capacity in the April-June quarter, once the inventory is adjusted in stores around the world.
However, Patrick Moorhead, an analyst at Moor Insights & Strategy, said he was a bit skeptical about the negative outlook for Apple.
Apple is scaling back the number of orders for iPhones that it’s sending to manufacturers in China, reports have claimed.
Wall Street has additionally checked its perspective on the highflying stock in recent months. Analysts are now bracing for output cuts; a third of them have trimmed revenue estimates since early December.
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The iPhone 6s and 6s Plus were launched in September past year, with Apple reporting sales of over thirteen million units within 3 days of availability, boosted by the smartphone going on sale in China at launch for the first time.
