Apple to cut production of iPhone 6S, 6S Plus by 30 percent

The multinational technology company, Apple will cut down the production of its iPhone 6s and 6s plus by nearly 30 per cent in the first calendar quarter of this year.

Apple is scaling back its orders for iPhones, The Wall Street Journal reports, forcing its Chinese suppliers to lay off staff as they ready themselves for lower sales of Apple’s flagship smartphone.

Daniel Ives of FBR Capital Markets said that the reports coming from China indicating a cutback in production are indeed “worrisome”, however, he pointed out that the new iPhone versions, expected to release later this year, are set to offer significant improvements and may very well cause another surge in sales.

Apple is reducing the number of iPhone 6s and 6s Plus models by 30 percent, and has reportedly told parts makers to keep production at the same level as their older models, the iPhone 6 and 6 Plus, which came out a year earlier.

Sharp dropped 2.5 percent as of the midday trading break in Tokyo and Japan Display Inc. slumped 2.9 percent. The report clarifies, however, that Apple products “have not lost their appeal”, and that Apple is expected to restore production to normal levels for the April-to-June quarter.

Tepid forecast by Apple suppliers such as Jabil Circuit, which manufactures casings for iPhones, and Dialog Semiconductor GmbH in December stoked fears that iPhone shipments could fall for the first time.

However, Patrick Moorhead, an analyst at Moor Insights & Strategy, stated he was a bit skeptical concerning the production cut stories.

Fortune’s Don Reisinger reminds us that “several analysts, including those at Morgan Stanley, JP Morgan, and Barclays, said that Apple had reduced component orders on its latest handsets” last month, following predictions of “a year-over-year iPhone shipment decline of 15% in the quarter ending in March”.

According to a senior analyst at Mizuho Securities, retailers should be preparing for a year-on-year decline for iPhone sales. Indeed, you might call that Morgan Stanley analyst Katy Huberty recently issued a research note opining that the iPhone in 2016 will experience its first drop in sales in history, largely due to “higher prices in global markets (ex-China) and maturing smartphone penetration in developed markets weighs on upgrades and new user growth”.

Apple was not immediately available for comment.

Apple’s iPhone accounted for well over half of its revenue in its 2015 fiscal year, ended September 27.