iPhone Sales Slump, Apple Cuts Production By 30% As Share Value Falls.
Is Apple’s run of spectacular success coming to an end and has the Company, that has spent the last decade making billions struggling to find their next big hit?
This year Apple shares have fallen, now the Company who is struggling to grow sales of their popular iPhone is cutting production by as much as 30% as less people buy their products in particular their smartphone.
Slower-than-expected sales of the iPhone 6S and 6S Plus have prompted Apple to reduce its orders according to manufacturing partners who are now feeling the knock on effect.
Their shares dropped as much as 2.1 percent and had declined 1.7 percent to $110.22 at 2:07 p.m. in New York.
Apple introduced a smaller, cheaper handset dubbed the iPhone SE last month in an effort to plump up sales ahead of rolling out a new flagship model later this year.
Taiwan Semiconductor Manufacturing, one of the biggest suppliers of chips to Apple, on Thursday forecast revenue below analysts’ estimates for the second quarter, saying that demand for smartphones that cost more than $500 is waning.
“Ahead of the iPhone 7 people are holding onto their phones a little longer,” said Walter Piecyk, a New York-based analyst at BTIG LLC who recommends buying Apple shares. “But if this is as a result of lengthening product cycles then it could be a structural change for the industry.”
In January, Apple said sales would decline for the first time in more than a decade. Global smartphone sales will rise by less than 10 percent this year, the smallest increase since the market’s inception, researcher Gartner Inc predicted last month.
The Nikkei reported that Apple cut iPhone production by an estimated 30 percent in the January to March quarter and that the reduction is being extended for the subsequent three months.
Apple suppliers including Broadcom Ltd., Qorvo, Knowles. and NXP Semiconductors NV also fell following the report. An Apple spokesman didn’t immediately respond to requests for comment.
In January, Apple said it expected a fall in revenue for the quarter ending March – its first forecast for a revenue drop in 13 years – as the critical Chinese market showed signs of weakening. It also reported the slowest-ever increase in iPhone shipments.