After a disastrous quarter, Apple is cutting iPhone production

Faith Castro
January 12, 2019

Another source familiar with the situation said that under the revised plan, overall planned production volume of both old and new iPhones will be reduced to about 40 million to 43 million units for the January-March quarter from an earlier projection of 47 million to 48 million units.

Apple itself has affirmed that the iPhone XR is its best selling model, even though the XR was released a month after the release of the XS and XS Max. Apple's decision was followed by a report later that month that said three key suppliers of iPhone components were warning of weakening demand. BidaskClub cut shares of Apple from a "strong-buy" rating to a "buy" rating in a research report on Wednesday, September 12th.

Apple (NASDAQ:AAPL) last announced its quarterly earnings data on Thursday, November 1st. They are perhaps Apple's most important and key supplier and could be viewed as a strategic partner for the world's second most valuable company.

Cook blamed the significant fall in smartphone sales in China for the iPhone's struggle, as well as things like "foreign exchange headwinds".

Reuters reports that market research firm Canalys is expecting smartphone shipments in China to fall three percent in 2019 after a 12-percent decline a year ago.

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Last year, Apple sold 52.21 million iPhones in the January-March quarter.

Following Cook's message, Apple's stock went on an accelerated drop, experiencing a severe 38% drop between a maximum valuation of 232.07 per share on October 3 to an all-time low of $142.08 per share the day after the investor letter.

Apple did not immediately respond to a Reuters request for comment. -China trade war, even though most of its products are not yet subject to additional USA tariffs imposed on Chinese-made goods.

Apple's Chief Executive Officer Tim Cook told CNBC on Tuesday that "naysayers on Wall Street were under-appreciating the Company's growing ecosystem of devices and services".

Because Apple preannounced slower sales in Q4, the Nikkei is making out that Apple ordering 10 less iPhone for Q1 is some huge revelation.

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