Citing people familiar with the matter, The Wall Street Journal is reporting that Apple will cut the planned production of its flagship iPhone X for the three-month period ending March 31, due to weaker-than-expected demand. In a separate report yesterday, the Nikkei Asian Review had also claimed that Apple will slash its production target for the iPhone X in the three-month period from January by almost 50%.
According to a person with knowledge of Apple’s production goals, the tech giant plans to make about 20 million iPhone X handsets in the first quarter, down from its initial plan of 40 million units. One source even said that Apple has cut orders for components used in the iPhone X by nearly 60%. “They always do this when things aren’t selling well. It’s a real headache,” one of the sources told WSJ.
Some consumers have said they don’t believe the features justify the iPhone X’s high price. “People love Apple, but they still have limitations,” said Kylie Huang, a Taiwan-based analyst at Daiwa Capital Markets covering the Apple supply chain.
Instead of the iPhone X or iPhone 8, though, some customers have turned to older, less-expensive models such as the iPhone 7 and 7 Plus, said Canalys analyst Nicole Peng. She said that wasn’t necessarily a bad thing for Apple, noting that the older models are cheaper to produce and generate relatively high margins per unit.
Following Nikkei’s report yesterday, Apple’s stock fell by almost 5.4%, whereas another 1.5% drop in the shares has been observed in afternoon trading today .