Apple has apparently cut iPhone production by 30%

This might seem surprising given the strong sales of the iPhone 6S and iPhone 6S Plus towards the end of 2015, but it seems Apple is finding it tougher to grow demand for its phones than it expected.

Sales of the iPhone 6S and 6S Plus, which launched in September 2015, have been lackluster in comparison with those of the iPhone 6 and 6 Plus, the year before, said the Nikkei report.

(Bloomberg) – suppliers led by Sharp Corp. and Pegatron Corp. fell after Nikkei Asian Review reported the US company would reduce the first quarter output of its latest iPhones by about 30 percent.

The Nikkei report triggered concerns about slowing shipments of the iPhone 6s and iPhone 6s Plus handsets; thereby causing Apple’s shared to plunge by almost 2.5 percent.

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

“[Wall] Street was bracing for a reduction but the magnitude here is a little more troublesome”.

Apple and Foxconn did not immediately respond to requests for comment. In response to decreased orders, Foxconn – Apple’s main iPhone supplier – has been given $12 million of government subsidies to help it avoid mass layoffs.

However, Patrick Moorhead, an analyst at Moor Insights & Strategy, stated he was a bit skeptical concerning the production cut stories. Production lines will likely receive a boost in orders once again later in the year.

“Apple has been gaining significant market share in pretty much every region, and I’m not seeing a global slowdown”, Moorhead told Reuters. 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.

A new report from a reputable publication claims that Apple has started slowing down iPhone production because it possibly anticipates low sales this time around as opposed to a year ago.

According to Thomson Reuters, many analysts have trimmed their estimates on Apple, expecting the company to increase revenue this year by just under 4 percent – compared to a 28 percent jump in the previous financial year.