IPhone production cut report sets ominous tone

Alonzo Simpson
November 19, 2018

The components are mostly used in Apple's latest iPhone XR model, designed as a follow-up to the iPhone 8 and slightly cheaper than the new XS and XS Max models, and the decision was made about two weeks after the new handsets hit the shelves globally, the two people said. Reports on the internet are attributing the reduction in production to the "lower-than-expected" demand of the latest devices. This news piles on previous reports which had suggested the cuts applied only to the iPhone XR.

Lumentum Holdings Inc (LITE.O), AMS AG (AMS.S), companies which supply Apple with software needed for its FaceID technology, also lowered their forecasts.

Apple's largest assembler of iPhones in China, thousands of workers have voluntarily left earlier than they meant to after Foxconn cut overtime hours that are typically available during peak production periods, people familiar with the matter said. Apple's iPhone XS Max is seen in this photo.

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That shift to more premium pricing had been telegraphed by the iPhone X, which launched in 2017 and debuted Apple's newest design language among other features. In India, Apple's sales have stumbled, particularly in light of the new products which are priced highly.

Apple said earlier this month that it would stop disclosing its sales numbers for iPhones, iPads and Mac computers in its quarterly reports. "As demonstrated by our financial performance in recent years, the number of units sold in any 90 day period is not necessarily representative of the underlying strength of our business", Luca Maestri, Apple's chief financial officer, said.

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