Apple cuts first quarter 2019 iPhone production by 10 percent, report says
On the back of Apple's negative earnings forecast revision, a new report claims the company is bracing for a continued iPhone sales slowdown by scaling back production plans for the first calendar quarter of 2019 by 10 percent.
Apple's iPhone XR
Citing sources close to the matter, Nikkei Asian Review on Wednesday said Apple last month asked partner suppliers to manufacture fewer iPhones than originally planned for the three-month period ending in March. According to the publication, the recent supplier update marks Apple's second request to draw down production in as many months.
The revision reportedly affects all new model iPhones, which include the iPhone XS, XS Max and XR. Old models are also impacted, with the company now targeting production of between 40 million to 43 million total iPhone units for the first quarter, down from earlier estimates of 47 million to 48 million units, the report said.
"The level of revision is different for each supplier and depends on the product mix they supply," a source said.
Today's reported estimates represent a 20 percent year-over-year contraction from the 52.2 million iPhones sold in the second fiscal quarter of 2018.
The report arrives less than a week after Apple adjusted down revenue guidance for the current holiday quarter. In a letter to investors, CEO Tim Cook blamed the shortfall on weaker than expected iPhone sales in China and other developing nations.
Cook in an interview today addressed concerns of a slowing iPhone market. In particular, when asked to comment on reports calling the iPhone XR a "flop," Cook said the mid-range handset has outsold its more expensive iPhone XS stablemates every day since its launch in October.
Apple's iPhone XR
Citing sources close to the matter, Nikkei Asian Review on Wednesday said Apple last month asked partner suppliers to manufacture fewer iPhones than originally planned for the three-month period ending in March. According to the publication, the recent supplier update marks Apple's second request to draw down production in as many months.
The revision reportedly affects all new model iPhones, which include the iPhone XS, XS Max and XR. Old models are also impacted, with the company now targeting production of between 40 million to 43 million total iPhone units for the first quarter, down from earlier estimates of 47 million to 48 million units, the report said.
"The level of revision is different for each supplier and depends on the product mix they supply," a source said.
Today's reported estimates represent a 20 percent year-over-year contraction from the 52.2 million iPhones sold in the second fiscal quarter of 2018.
The report arrives less than a week after Apple adjusted down revenue guidance for the current holiday quarter. In a letter to investors, CEO Tim Cook blamed the shortfall on weaker than expected iPhone sales in China and other developing nations.
Cook in an interview today addressed concerns of a slowing iPhone market. In particular, when asked to comment on reports calling the iPhone XR a "flop," Cook said the mid-range handset has outsold its more expensive iPhone XS stablemates every day since its launch in October.
Comments
Cook supposedly says "the iPhone XR has outsold the XS since it's launch in October", ummm yeah, could it be because the XR is a shit wad cheaper than the XS?!
Don't get me wrong, coz I am an Apple user / lover going on 20 years and I would dearly love to "upgrade" my ageing iPhone 6 to a lovely new current model iPhone but, not at these ludicrous prices.
Secondly, Apple has reverted back to it's John Scully days of saturating the market with multiple versions of the same product and Apple was 90 days away from being bankrupt. Something Steve Jobs eradicated upon his return to Apple in the 90's and we know how well the company did after that.
Sorry Mr Cook, you're probably a nice guy but, the advances of technology and idea's died with Steve Jobs and you do not have the ability to think outside the box, therefore, Apple seems to be going no where, whilst still bashing up the prices beyond belief, all the while releasing buggy software that makes the Apple Eco-sphere verging on being as bad as Microcrap (you know who I'm talking about).
Personally, Steve Jobs should have left Tim Cook in his previous post crunching numbers and doing supply orders. Steve should have made Craig Federighi CEO and front man for the Apple business and brand.
Rant mode = off ;-)
Come on Apple, lets get back to being inspiring and great, without the overly high price tags you THINK you can command. Before it's too late.
Uh, iPhone is still VERY indicative of Apple’s business. Tim Cook wouldn’t have put out a 1,400 word letter to investors (all about iPhone) if it wasn’t. iPhone hits a rough patch...hey but Apple’s a services business now! It’s all about the ecosystem! Sorry doesn’t work that way.
Please refrain from posting your ignorant tirades in the future, it exposes your lack of respect for the efforts of countless Apple engineers, efforts and our community. Spend a few moments with google, then articulate your message with facts and opinions.
Your pricing statements are relative and hopefully you pay for an education before another iPhone, “coz” a base model XR is $749 without trade in, or ~$20 month if you average it out 3 years. Maybe you don’t know an iPhone can be leased or financed without interest?
Its not “greedy” that Apple maintains a healthy margin to reinvest strategically. Your contradiction is obvious, Apple needs to make great products that are affordable to you, and at a reduced margin. Your second point regarding multiple versions is also incorrect, you’re comparing two different things. Limited color, storage, and screen size options across so many millions of devices is necessary for market needs. Not to be confused with Apple’s old overlapping and confusing product portfolio.
Since you obviously have no knowledge of scales of economies, market segmentation, consumer needs, research & development, global expansion, supply chain & component contracts, and the endless innovation at Apple. You should take your 1 post self to the closest carrier and get a free Android device.
In case your interested in reality, it takes massive amounts of money to innovate. No other consumer electronics company in the world can innovate at Apple’s level, not for lack of spending money or trying. I guess you expect a paradigm shifting product every couple years and that Apple can single handedly push the state of the art along so many fronts. Oh wait, Apple is doing that, but you wouldn’t notice.
Here’s an incomplete list of things Apple is improving or innovating; yearly upgrades to the ‘A’ series processors approaching intel chip capabilities, mobile GPUs, computer on chips, computers, countless integrated component chips, health sensors cleared by the FDA, smart speaker, wireless headphones, watches, augmented reality, mapping, neural chips, advanced biometrics, customer privacy, life saving health alerts, smart home API, voice assistant, coding language, web engine, tablets, graphics API, multiple operating systems every year, streaming music, media network, news, cloud services, customer service, artificial intelligence, Titan car project, and the company that will make augmented reality ubiquitous.
Hopefully you don’t also think that hardworking people making an income larger than yours are greedy and ludicrous. Thanks for playing...
Plus the user base needs to keep growing to generate all that “service revenue” growth as well they are keen to emphasise.
Cook said yesterday “people underestimate Apple’s revenue generating potential “ and by that he means the ability to bleed that user base dry with services (Apple Pay / TV / Music etc) plus price rises.
But he’s gotta keep selling more iPhones.
You sir have drank so much of the Apple kool aid that you can’t see the wood for the trees.
Apple cant have it both ways - creating an ever growing mass user base and ridiculously high prices. One has to give.
They will I’ll say they don’t care about the mass market but in the next breath talk about how many iOS devices they have to sell services to.
Cook has lost the reality. No clear innovation, just numbers and pointless features like animojis, stupid AR and things that you don't use ever just to increase the prices.
Apple will be crying in few years for a visionary like Jobs.
How I see it what happened with Cook:
- prices went up
- quality of the products down (iPhone, Mac, haven't been using anything else since Jobs died)
At list software keeps the quality standards still high, though, really lots of stupid features get introduced that you never use and some basics are missing since years!
Apple set mad prices. Market reacted by not buying, wether you like it or not. Thats why we have this forum thread.
Like @Saarek said. iPhone is the best phone, but is not x4 better than Huawei, Samsung and other knockoffs. And its priced 4x!! Yeah iPhone has great design, hw and the best software. But far from what you are saying cheap Android rubbish. There are some decent Android phones that can do everything iPhone can and even do some things better.
IMO Apple maintains margins far higher than they have any business use for.
...and no they aren't the only ones. We won't even get into stratospheric upper management pay, fairly unique to the US, which grows from the "maximize profits" tree. Yeah, I think there's some greed involved.