The Nikkei Asian Review on Wednesday confirmed that Apple is ready to slash its new iPhone production by about 10% over the next three months.
According to Nikkei, the tech giant has already intimated its suppliers in December to produce fewer new iPhones than what was initially planned for first quarter of 2019.
This would entail a reduction from the overall planned production volume for new and old iPhones to about 40 million to 43 million units for the March quarter — down from an earlier prediction of 47 million to 48 million units.
This would be the second time in two months that Apple is trimming its smartphone production. The new revised plan would apply to all new iPhone models — the XS Max, XS and XR.
Apple, including its rivals like Samsung, is now finding itself in a highly competitive market where growth is falling. According to the International Data Corporation, global smartphone shipments fell by ~6% in the third-quarter of 2018 — that was the fourth consecutive quarter of year-over-year declines, which raised concerns over the market's future.
Apple announced the plan to cut production just after a week it had slashed its guidance on revenue citing reasons like lower-than-expected iPhone revenue in the Greater China region and weakening economy in China.
Some analysts explain that today’s smartphones are all alike and offer little difference. In such a scenario, the need is now to focus on innovation.