Apple is going to continue with its reduced rate of iPhone production due to slowing sales, even as the financial quarter which brought several problems to the tech giant, draws near its close. The report comes through Nikkei business daily, which is citing parts suppliers to the Cupertino giant.
It also seems like the newly released iPhone 5 SE has failed to significantly boost sales, since the company is not planning to make an exception of it, in its plan of reduced production. Meanwhile, Apple has notified several parts suppliers in Japan and elsewhere of its plans to continue with a reduced production for the near future, said the report.
Apple has cut down production in the past, however what has everyone worried this time is the fact that none of its production cuts have lasted this long. The Nikkei had first reported the iPhone 6s and 6s Plus models production cut back in January, with things expected to return to normal by this quarter. The company’s previous cut — which came with iPhone 5 C — lasted for barely a month. However, almost two quarters and a brand new device later, the company is still looking at the prospect of reduced sales.
Meanwhile, the fallout from the report has caused shares of Apple and some of its suppliers to slump down. While Apple’s 1.8 percent to $110.05, suppliers also fell following the report.were hit just as hard with Skyworks Solutions Inc (SWKS.O) losing 1.4 percent, Broadcom Ltd (AVGO.O) 2.4 percent and Jabil Circuit (JBL.N) down by 1.7 percent.
And that is just the fallout from the report. We can expect a further drop in the supplier stocks as the orders from Apple, do not come in expected volumes. Unless of course, the company chooses to offset the reduction in production by an early launch of its next flagship. Apple is also expecting a revenue drop in the quarter which ended in march — a significant announcement considering that it’s a first in almost 13 years.
However, the iPhone maker is not the only company going through tough times. Various research firms have predicted a slowdown in smartphone sale all around, following several largest markets — including the chinese — reaching saturation. We can expect at least some of these companies to make a greater push for India, with its huge population and prospects, in the near future.