Apple braces providers for lower iPhone sale volumes

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(FinancialPress) — There is worry among Apple‘s providers. A report by Nikkei indicates that the American company warned providers around the globe that the next wave of iPhone manufacturing will suffer a cutback.

The smartphone manufacturer ordered a 20% decrease order for its next wave of devices, says the report. A possible reason behind the order is perceived waning interest in its historically successful flagship.

“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,” a supply chain source told the Nikkei Asian Review. “For the three new models specifically, the total planned capacity could be up to 20% fewer than last year’s orders.”

AAPL‘s stock fell a full 2% in premarket trading, dragging the Nasdaq as a whole down by 0.8%. FAANG stocks performance always has a heavy effect on the index at large. At the time of this publication, the stock has already dropped 0.70% more.

“The production yield for the LCD model’s ‘touch’ function is not satisfactory at the moment, but it is improving,” said another source. “The cost-effective model is viewed as the tool for Apple to boost its total shipment volume this year, and all the suppliers are doing everything they can to make sure the LCD one hits the shelves as soon as possible.”

Losing interest?

2017‘s order of iPhone 8, iPhone 8 Plus and iPhone X units placed by apple was of 100 million. This year‘s order is considerably more conservative – 80 million iPhones.

Nikkei added that iPhone will roll out 3 new models during fall of 2018. All models will boast FaceID cameras. The difference between premium and budget models will lie in the display – with the former having bright OLED displays and, the latter, standard LCD displays.

Investors have been keeping a close eye on Apple‘s sales performance lately, with a widespread sentiment of them feeling flat and few indications of that changing. The company fell short of shipment expectations in the first quarter of the current year, having shipped 52.2 million iPhone units when market expectations laid at 53 million.

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Ruben is a South American writer who focuses on the state of the cryptocurrency, cannabis and tech industries worldwide.

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