Apple to cut iPhone 6s orders by 30%

Apple Inc is expected to cut production of its latest iPhone models by about 30 percent in the January-March quarter due to mounting inventories, the Nikkei reported, rattling the nerves of investors in the USA giant’s Asian suppliers.

That slow down is really starting to affect Apple, it seems, as the company is getting ready to cut production of its newest models by almost a third in the coming quarter, according to a report out from Nikkei on Tuesday. Apple hopes the slowdown in production will enable retailers to deplete their stocks, and the company plans to resume production back to normal levels for the second quarter of 2016.

Suppliers that provide Apple with parts for the iPhone have reported scaled-back orders, which has led multiple investment firms to the conclusion that production of the smartphones will decrease. Some are well-known names, such as Sharp, LG and Sony.

SAN FRANCISCO Shares of Apple Inc (AAPL.O) fell to their lowest since August on Monday following recent worries about potentially soft iPhone sales but fared better than a 2 percent drop in major indexes. But top executives at the Cupertino, California, company said last fall they expected to sell more iPhones during the last three months of 2015 than they did a year earlier, when the company sold a record 74.5 million. Not to mention the fact that customers saw little difference from the previous generation of smartphones to the current ones.

The shares of London-listed Apple suppliers suffered knock-on effects with chip maker ARM down 3.1%, Imagination Technologies down 1.5%, and Laird off 1.7%. However, inventories of the two new models are piling in different markets including Europe, Japan and China. The panic around China is once again raising its head, and the iPhone 6s demand is “less than stellar”.

The one attribution in the piece is to an analyst at Mizuho Securities: “Businesses need to prepare for a potential year-on-year decline in iPhone output for 2016 as a whole, said Yasuo Nakane, a senior analyst at Mizuho Securities”.