Skip to main content

Apple Inc has cut production orders in recent weeks for all three iPhone models launched in September, the Wall Street Journal reported on Monday, citing sources.

A lower-than-expected demand for the new iPhones and Apple’s decision to offer more models has made it difficult to anticipate the number of components and handsets the company needs, according to the WSJ report.

Apple shocked investors a few weeks ago with a sales forecast for the Christmas quarter below Wall Street expectations, prompting certain suppliers to issue warnings that pointed to weakness in new iPhone sales.

Story continues below advertisement

Screen maker Japan Display Inc cut its full-year outlook citing weaker smartphone demand, while British chip maker IQE Plc said it expects a material reduction in its financial performance in the current year.

Lumentum Holdings Inc, AMS AG, companies which supply Apple with software needed for its FaceID technology, also lowered their forecasts.

Another supplier Analog Devices Inc is expected to report fourth-quarter results before markets open on Tuesday.

Apple shares were down 3.7 per cent at $186.38 on Monday, while Lumentum, Skyworks Solutions Inc and Qorvo Inc were down between 2.7 to 6 per cent.

Forecasts have been particularly problematic for iPhone XR with Apple cutting its production plan by up to a third of the nearly 70 million units some suppliers had been asked to produce between September and February, WSJ reported.

As recently as last week, Apple informed several suppliers that it had lowered its production plan again for iPhone XR, the Journal said.

The company started selling its latest generation of phones, the iPhone XS and XS Max, in September and the XR model in October.

Story continues below advertisement

Analysts at Cowen & Co expect a modest hit from iPhone production cuts on memory chip makers like Western Digital Corp and Micron Technology Inc.

The brokerage forecast a 10 cent headwind to Micron and 15 cent headwind to Western Digital in the fourth quarter of 2018 and the first quarter of 2019 on lower iPhone builds.

Micron’s shares were down 3.4 per cent while Western Digital was down 1.7 per cent.

Apple did not respond to a request for comment.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter