Apple cuts iPhone production amid fears of slowing demand

Meanwhile, a report in the Nikkei Asian Review cited “several parts suppliers” in a piece claiming Apple plans to slow production of the iPhone by roughly 30 percent during the first quarter of 2016.

FBR Capital Markets analyst Daniel Ives told the news agency Reuters that the production cut was “eye-opening” which would speak to softer demand.

Shares in Apple slipped 0.45% in after-hours trading in the United States to $102.25, after losing 2.51% to $102.71 during the regular session, while in London on Wednesday morning, chip supplier ARM was down more than 3% to 973p. He said that Wall Street was bracing for a cut but the magnitude was a bit more worrisome.

A Chinese government document also showed a provincial capital had offered Foxconn, also known as Hon Hai Precision Industries, $12m in subsidies to offset layoffs, the journal reported.

Other suppliers such as Japan’s Murata Manufacturing Company, Alps Electric Company and TDK Corporation fell by 3% or 4%.

“Apple continues to be gaining substantial market share in pretty much every area, and I am not finding a worldwide slow down”, he said.

It looks like Apple is now scaling back on the production of iPhones according to new reports this week.

Apple’s stock over the last month has trended downwards.

Production is anticipated to return to normal by the second quarter after the completion of inventory adjustment.

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. Apple has increasingly turned its attention to the lucrative China market, where sales of iPhones have grown 65 per cent year-on-year.