Apple is again reducing production of iPhones due to weak sales of its flagship iPhone 6s models and rising inventory levels, Japan’s Nikkei newspaper reported.
The US company in the January-March period reportedly cut production of the iPhone 6s models by 30 per cent, which debuted last September, due to mounting inventories.
According to component suppliers, Apple told them it will maintain the lower output level in this current period (April-June).
Sales of its new iPhone SE, launched last month, reportedly won’t be enough to make up for the drop in its flagship models, Nikkei said.
The newspaper said a long-term cut in production would harm Japanese part suppliers of LCD panels, memory chips and image sensors for cameras.
iPhone sales increased just 0.4 per cent in its first fiscal quarter (October – December), when the company sold 74.8 million iPhones. That’s the lowest growth since the handset was launched in 2007. Apple CEO Tim Cook said in late January the company expects a fall in unit sales for the iPhone in the January-March quarter.
After revenue in its first fiscal quarter rose 1.7 per cent to $75.9 billion, the company expects its Q2 revenue will be in the $50 billion to $53 billion range, down from $58 billion in the year ago period. It would represent Apple’s first revenue decline in 13 years.