Due to lower demand than expected, Apple has lessened production orders for the three new iPhone models the company launched in September. The Wall Street Journal reported this on Monday, November 19.
The report also says that because Apple has offered more models than usual this year, it has been hard to anticipate how many handsets and components are needed to be produced.
This news comes on the heels of the company’s announcement to its investors some weeks ago that its sales forecast for the Christmas quarter is lower than the expectations of Wall Street. This announcement led some suppliers to warn about low sales of new iPhones.
As a result, suppliers are also reporting lower forecasts.
Japan Display Inc, which makes screens, lowered its outlook for the year due to a lower demand for smartphones, and IQE Plc, a UK firm that makes chips, announced it expects its financial performance for 2018 to be reduced. Similarly, Lumentum Holdings Inc, which works with Apple for supplying software for its FaceID function, showed lower forecasts.
Shares for Apple have lowered in value, going down by 3.7 percent to $186.38 on November 19, Monday. Shares for Lumentum, Qorvo Inc and Skyworks Solutions Inc all went down between 2.7 and 6 percent.
The Wall Street Journal also reported that Apple shrank its production plan for the iPhone XR by nearly one-third of the 70 million units that suppliers were asked for. The company has been telling suppliers about the lower production plan for the iPhone XR, which was released in October.
Cowen & Co, an analyst firm, says that memory chipmaker companies such as Western Digital Corp and Micron Technology Inc may expect modest losses. Shares for Micron were down by 3.4 percent, and shares for Western Digital, by 1.7 percent.
Apple has apparently not commented on the matter.