Slower-than-expected sales have forced Apple to slash iPhone X production by half for the January-March period — to 20 million units from the earlier planned 40 million units, the media reported. According to a report in Nikkei Asian Review on Tuesday, the Cupertino-based giant has notified suppliers that it had decided to cut the iPhone manufacturing by 50 percent owing to slower-than-expected sales in Europe, the US and China.
“With components deliveries delayed, Apple had struggled to keep up with demand for the iPhone X immediately after its launch. Rising inventories appear to have pushed the company to sharply slow production,” the report added. “Looking forward, the lacklustre sales could result in a delay to the company’s plans to introduce OLED screens in other iPhone models,” the report noted.
South Korean giant Samsung that currently provides OLED panels for $999 iPhone X will also be hit as its orders will also be affected. The production cuts for iPhone X, said the report, will have a domino effect on manufacturers that supply high-performance components for the handset, acewith the combined impact expected to run into billions of dollars for the January-March quarter alone”. Apple’s 10th-anniversary “super-premium” smartphone went on sale across the globe on November 3.
Earlier this month, an analyst associated with Taiwanese business group KGI Securities said that more sluggish-than-expected response may lead Apple to discontinue the first-generation iPhone X around mid-2018 as the second-generation model is set for launch later this year.
According to Ming-Chi Kuo, the most famous analyst with KGI Securities when it comes to Apple, the Cupertino-based giant will not sell iPhone X at lower price as it will hurt its other products in the lower-priced premium segment.
Kuo estimated that Apple would ship about 18 million iPhone X units in the January-March quarter in 2018. “We expect iPhone X will go to end of life (EOL) around mid-2018 and that total life cycle shipments will be around 62 million units, lower than our previous forecast of 80 million units,” the analyst said.
Apple shipped 29 million iPhone X units in the fourth quarter of 2017, Singapore-based market research firm Canalys said, adding that this made iPhone X the world’s best-shipping smartphone model over the holiday season. “The iPhone X performance is impressive for a device priced at $999, but it is slightly below industry expectations,” said Ben Stanton, analyst at Canalys.