Apple reportedly halved production plans for the iPhone X amid weak demand and will delay a handful of iOS updates scheduled for the back-half of the year to focus on security and performance improvements.
Sources told The Wall Street Journal (WSJ) Apple will cut its iPhone X manufacturing target from 40 million to 20 million in the current quarter. Others told WSJ Apple slashed its component orders by as much as 60 per cent.
The former figure squares with an earlier report from Nikkei Asian Review, which attributed the drop to lower-than-expected holiday sales of the device. Production of Apple’s lower tier iPhone 8 and iPhone 7 models is expected to remain the same, Nikkei Asian Review added.
Analyst group Canalys estimated iPhone X shipments hit 29 million units in Q4 2017. However, upgrade rates remain low for US operators, which serve as a primary distribution channel. BTIG analyst Walter Piecyk noted Verizon reported a 7 per cent year-on-year drop in the number of smartphones sold and its lowest holiday quarter upgrade rate in ten years during the quarter.
Earlier this month, KGI Securities analyst Ming-Chi Kuo lowered the lifetime sales forecast for the iPhone X from 80 million to 62 million units and predicted production of the model will cease sometime this year.
Apple is due to report fiscal Q1 2018 (calendar Q4 2017) earnings on Thursday (1 February).
Separately, news website Axios reported Apple will delay some planned software updates to focus on security and performance issues.
Features including an update to the home screen, improvements to key apps like mail, and photo taking and editing upgrades will be bumped into 2019. Instead, Apple will direct its energy toward making iPhones “more responsive and less prone to cause customer support issues,” Axios reported.
However, the company is still expected to include enhancements to augmented reality, digital health and parental controls in an upgrade later this year.