Apple Expected to Cut iPhone 6s Shipments by 30% in Q1 2016

Inventories of the new iPhones, which debuted in September, have piled up at retailers in China and Europe amid lacklustre sales as an increase in the U.S. dollar against emerging markets currencies makes the device more expensive in those countries, Nikkei reported. It could explain why Apple is supposed to be fast tracking the iPhone 7.

Shares of Apple (NASDAQ: AAPL) dipped in pre-market trading Wednesday morning following multiple reports that the company has decreased orders of the iPhone during the past few months.

Apple shares fell 2 per cent following Nikkei’s report, hitting a low of $102.41.

“This is an eye-opening production cut which speaks to the softer demand that Apple has seen with 6s out of the gates”, FBR Capital Markets analyst Daniel Ives said.

Apple and Foxconn did not immediately respond to requests for comment.

To stem any layoffs, Foxconn was offered an 82 million yuan ($12.53 million) subsidy by the government of Zhengzhou, the capital city of the Henan province in eastern China.

It looks like Apple is now scaling back on the production of iPhones according to new reports this week. Other providers including Japan’s Murata Manufacturing Co Ltd, TDK Corp and Alps Electric Co Ltd dropped by 3% or 4%.

In recent weeks, Wall Street analysts have also tempered their views on the high-flying stock.

The publication states that output will be reduced while current models are sold, before an expected return to productivity later in 2016.

Normally, Apple is expected, for financial 2016, to grow sales by a far cry from the 28% sales growth it achieved, under 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.

Customers gather outside an Apple store before the release of iPhone 5 in Munich early September 21, 2012.