Ap­ple re­port­edly to slash pro­duc­tion of iPhone by 10 per­cent

Rev­enue has been hurt by weak­en­ing busi­ness in China

The Mercury News - - Sports - By Rex Crum [email protected]­yare­anews­group.com

Faced with a rev­enue short­fall stem­ming from dis­ap­point­ing de­mand for iPhones and a weak­en­ing of its busi­ness in China, Ap­ple re­port­edly is cut­ting its iPhone pro­duc­tion by 10 per­cent dur­ing the first quar­ter of this year.

The Nikkei Asian Re­view re­ported Wed­nes­day that Ap­ple told its prod­uct sup­pli­ers in De­cem­ber to not make as many iPhones as the com­pany ini­tially in­tended for the quar­ter end­ing in March. Nikkei cited what it called “sources with knowl­edge of the re­quest” for its in­for­ma­tion on the mat­ter.

The news­pa­per said Ap­ple in­tends to cut pro­duc­tion on all three of its new iPhone mod­els — the iPhone XS, iPhone XS Max and iPhone XR — and will re­duce to­tal out­put dur­ing the quar­ter to be­tween 40 mil­lion and 43 mil­lion phones from ear­lier plans to make 47 mil­lion to 48 mil­lion

iPhones.

The re­port that Ap­ple is cut­ting its iPhone pro­duc­tion plans comes one week af­ter the com­pany stunned the busi­ness world — and Wall Street — by low­er­ing its rev­enue es­ti­mates for the quar­ter that ended in De­cem­ber in large part be­cause of weak­ness in de­mand for iPhone up­grades and its busi­ness in China.

At that time, Ap­ple Chief Ex­ec­u­tive Tim Cook said the com­pany ex­pects to re­port fis­cal first-quar­ter sales of $84 bil­lion, down from an ear­lier fore­cast of $89 bil­lion to $93 bil­lion in rev­enue. The com­pany will give its full quar­terly earn­ings re­sults af­ter the close of trad­ing Jan. 29.

“Lower than an­tic­i­pated iPhone rev­enue, pri­mar­ily in Greater China, ac­counts for all of our rev­enue short­fall to our guid­ance and for much more than our en­tire yearover-year rev­enue de­cline,” Cook said last week.

In an in­ter­view with CNBC on Tues­day, Cook said that Ap­ple re­mains com­mit­ted to build­ing up busi­nesses be­yond the iPhone, and said that the com­pany gen­er­ated $100 bil­lion sales in its last fis­cal year from ser­vices and other ar­eas not tied to the iPhone.

KARL MONDON — STAFF AR­CHIVES

Ap­ple in­tends to cut pro­duc­tion on all of its new iPhone mod­els — XS, XS Max and XR.

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