Apple has decided to cut the production of 2018 iPhone models once again in an attempt to cope with declining sales worldwide.
A report for the Nikkei Asian Review indicates that production has been lowered by 10 percent, and this is the second time in just two months when Apple comes down to such a decision.
The cited source speculates that Apple is playing the safe card as it expects another decline in terms of iPhone sales in the coming months. The production cut was announced shortly after CEO Tim Cook announced revised revenue expectations, the report continues, and it concerns all new iPhone models, including iPhone XS, iPhone XS Max, and iPhone XR.
“The level of revision is different for each supplier and depends on the product mix they supply,” the source quotes a person familiar with the matter as saying.
Further decline in 2019
Apple is thus reducing production for 2018 iPhones from 47 million units to as low as 40 million units, which itself is a 20 percent drop year-on-year from 52.2 million units sold by Apple between January and March 2018.
Apple suppliers have also confirmed that they expect dropping sales in 2019. Catcher Technology, which builds metal frames and assembles the glass back of the iPhone XR, says the challenging conditions are likely to generate a further decline this year.
"We expect the market conditions at the end of 2018 will continue into 2019," Catcher told its investors in a statement.
Apple blamed the growing tension on import fees between China and the United States as one of the reasons iPhone sales are going down. On the other hand, analysts believe the high price of the 2018 generation makes potential customers stick with their devices for a longer period of time, eventually affecting sales of new models and delaying the planned upgrades.