Apple reportedly cuts production orders for iPhone XS, XS Max and XR

Darnell Taylor
November 21, 2018

As recently as last week, Apple informed several suppliers that it lowered its production plan again for iPhone XR, the Journal reported. This reduction in production has also affected its suppliers who depend on Apple.

Apple stock has fallen more than 15% this month as investors grow increasingly anxious about iPhone sales.

Each of the five FAANG stocks - Facebook, Amazon, Apple, Netflix and Google-parent Alphabet - slipped into a bear market on Monday - meaning a fall of 20 per cent or more from the stock's 52-week high.

Apple surprised its investors when it forecasted lower-than-expected iPhone sales predictions for the upcoming holiday season, and Christmas quarter.

A lower-than-expected demand for the new iPhones and Apple's decision to offer more models has made it more hard to anticipate the number of components and handsets the company needs, according to the paper.

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Apple stock was down 3.8% to $178.81 early on Tuesday.

Recent weakness has come on growing concerns over iPhone demand. "In our experience with mobile phones, when pricing power is lost, consumer technology companies tend to either lose margins or market share or both".

"We do not believe the rest of the world is as committed to Apple's product ecosystem, so switching costs outside the United States tend to be lower", the analysts wrote. Such concerns are thought to be why Apple made a decision to stop reporting unit sales, which analysts relied on as a key metric. Taken on its own, this could be a sign that iPhone sales are slowing down as prices begin to rise.

"Without the FAANG leadership, including Apple, the market is going to struggle", said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald in NY.

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