The America tech giant Apple Inc. is indicating to trim production of iPhones by about 10 percent between January-March which is the first quarter of 2017, the Nikkei financial daily report, citing calculations based on data from suppliers.
The company had slashed output by 30 percent in January-March this year due to accumulated inventory, the paper said.
Apple’s shares were down 0.84 percent in midday trading, in line with the Nasdaq stock index.
Using data from analysts and examining supply chain orders, the daily Japanese publication believes slower than expected sales of Apple’s latest smartphone will lead to a reduction of output during the next three months.
This isn’t the first time that Apple has scaled back production on its flagship handsets. Last year saw the iPhone 6S and iPhone 6S Plus production scaled back in the first quarter of the year due to an abundance of units in the supply chain from over-estimated Q4 sales.
At that point the popularity of the iPhone SE was also in question so it made sense to keep the supply chain as lean as possible so any impressive SE sales would not result in stock lying around unsold – Apple continues to bias towards ‘just in time’ manufacturing to reduce the slack between manufacturing and selling a handset.
Apple also cut back on the production numbers of the iPhone 7 and iPhone 7 Plus for the initial availability of the new handsets. In part this would be down to supply limitations for the dual-lens camera components for the iPhone 7 Plus, but demand for the iPhone 7 was sluggish at best.
While the sales of the new handsets remain strong, they are not as strong as in previous years.
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