Apple’s order cutting is affecting suppliers

Apple’s order cutting is affecting suppliers


On Monday, as reported by Wall Street Journal, Apple in current week has further reduced its production orders. The production order cutting was of Apples currently launched model of X series launched in September and October.

Few weeks ago investors were also shocked by unexpected low sales forecast announced by Apple during Holiday quarter. Pointing towards the weak sales of iPhone, that low sales forecast driven some suppliers to issue warnings.

According to WSJ, Apple remained failed to predict handset and component requirement correctly after deciding to launch more models and facing the declining sales of newly launched model. Sale of iPhone XS and XS Max was started in September and that of iPhone XR in October, but last week Apple intimated about its plan to reduced production of iPhone XR further more. Reportedly a reduction of nearly 70 million iPhone XR handsets will be occurred, which is the one third of what was initially planned to produce by suppliers from September to February.

Under these circumstances several of the Apple’s suppliers will be impacted rather instantly or gradually resultantly many of them forecasted soft sales or sluggish stock prices or will be facing weaker results for current quarter.

Due to weaker smartphone sales, British chipmaker IQE Plc lowered its full-year outlook. Forecast has been also lowered by AMS AG and Lumentum Holdings Inc provising APlle with software for FaceID technology. A material reduction has also been expected by the screen maker Japan Display Inc. Analog Devices Inc. is expectedly announcing its Q4 results on November 20. Largest assembler of the iPhone, Foxconn has also reduced overtime at its assembling facility.

Apple’s strategy which failed to add more features and continuously inclining prices are the major factors in sales drop as with this strategy customers might be sticking with their current phones for longer periods or buying older models.

To rising concern about iPhone sales or to story of WSJ, Apple refuses to comment.

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She is the Managing Editor for in-depth discussions and analysis as well as breaking news at Markets Morning. She works closely with Editor-in-Chief Zac Berry on content and publishing initiatives for the site. Brianna Clemons has worked as a financial journalist and editor since 1997. She lives in Bucks County, PA, with her husband, four young children and one dog.