Apple is reported to be scaling back its iPhone production by a third during the first three months of 2016
The company will slash production of the latest iPhone 6s and 6s Plus models by 30 per cent during the first three months of 2016, suppliers told Nikkei Asian Review.
The two new models have “piled up” at retailers across Europe, China, Japan and the US, although older, less expensive units have continued to sell, it claims. The report comes amid predictions from some analysts that Apple will announce its first ever fall in iPhone sales at the end of the month.
While Apple initially told its suppliers to maintain the production levels it established for the wildly successful iPhone 6 and 6 Plus the previous year, it has now told them to scale it back until inventory adjustment is complete. Production is expected to return to normal by the second quarter, April – June.
The new models were launched with much fanfare in September last year, with Apple reporting sales of more than 13 million units within three days of availability, boosted by the handset going on sale in China at launch for the first time. In the past, customers in China were forced to wait several weeks or months before the new models were approved for sale.
Apple is expected to sell some 220 million iPhones during 2016 according to analysts at FBR Capital Markets, which it describes as a “commendable achievement” for an “s” iPhone cycle, with under-the-skin updates rather than major cosmetic changes. The predicted launch of the iPhone 7 this September will shift around 250 – 255 million units.
Apple shares fell 2 per cent following Nikkei’s report, hitting a low of $102.41.
Analysts have been heralding the decline of iPhone sales for some time in the wake of increasing market saturation in developed nations. Apple has increasingly turned its attention to the lucrative China market, where sales of iPhones have grown 65 per cent year-on-year.
“Additionally, I continue to believe that China represents an unprecedented opportunity over the long term as LTE penetration is very low, and most importantly the growth of the middle class over the next several years will be huge,” he added.