Corroborating a recent report from Nikkei, the WSJ says Apple plans to make about 20 million iPhone X handsets in 1Q18, down from its planned production of 40 million. Some component orders have been cut by 60%.
“They always do this when things aren’t selling well. It’s a real headache,” a source said.
Apple hasn't responded to the reports but it will announced earnings for the quarter ending December 31st on Thursday. It's expected to announced a sales unit increase of 1.5% for all iPhone devices including the 6,7, and 8 models.
The late launch of the iPhone X without Touch ID and its $1,000 base price are thought to be reasons for the lower than expected demand.
“They need to adjust their attitude to consumers,” said Kylie Huang, a Taiwan-based analyst at Daiwa Capital Markets covering the Apple supply chain. “Consumers are not stupid. People love Apple but they still have limitations.”
It's possible that Apple could still perform well in the quarter to its mix of older generation devices.
“Apple doesn’t need to rely on one model to perform very well to be able to achieve the financial results they are aiming at,” says Canalys analyst Nicole Peng.
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