Apple plans to make 20% fewer iPhones

bengaluru — Apple expects to ship 80 million new model iPhones this year, down 20 per cent from what it had planned at the same time last year, the Nikkei reported on Friday, citing industry sources.

The California-based firm has asked its parts suppliers to make about 20 per cent fewer components for the three new iPhones it plans to launch in the second half of 2018, compared to last year’s plans for its iPhone X and iPhone 8 models, the paper reported.

The report adds to concerns of weakening smartphone sales after years of scorching growth as sales stagnate in key growth markets such as China and users upgrade their phones less often.

It knocked 2 per cent off Apple’s shares and send stocks of its suppliers around the world as much as 6 per cent lower, weighing on the US and other stock markets.

“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,” one of the four sources, who is in the supply chain, told the Nikkei Asian Review.

“For the three new models specifically, the total planned capacity

apple is quite conservative in terms of placing new orders for upcoming iPhones this year Apple supply chain source

could be up to 20 per cent fewer than last year’s orders.”

Many analysts have said the high price of the iPhone X — which sells for $1,000 and is the first iPhone to sport a new design since the launch of the iPhone 6 in 2015 — is also muting demand for the flagship.

Top Apple analyst Ming-Chi Kuo said earlier this week that Apple might cut prices of new iPhones to debut later this year by as much as $300, according to several media reports.

Kuo said that Apple was likely to launch a 6.5-inch OLED “iPhone X Plus,” a second generation of the iPhone X and an iPhone with a 6.1 inch screen.

Apple’s stock has added more than $200 billion in the past year, but demand for the iPhone X has underwhelmed investors.

D.A. Davidson & Co analyst Thomas Forte, however, played down the concerns.

“I am not overly concerned... about the lower supply speculations. Apple is doing enough in general to keep the ball moving forward,” Forte said.

Shares of Apple suppliers AMS fell 6 per cent, while those of Dialog Semi fell 4.1 per cent. US-based suppliers Advanced Micro Devices, Micron Technology Intel, Broadcom and Qualcomm were all down between 1 per cent and 3 per cent.

Apple did not immediately respond to a request for comment. —