Apple suppliers suffer as it struggles to forecast iPhone demand

Donna Miller
November 19, 2018

Citing multiple sources, the publication says that Apple has cut orders for "all three of the iPhone models that it unveiled in September"-meaning the iPhone XS, iPhone XS Max, and the iPhone XR". In 2017, overestimating demand for the then-new iPhone X, the tech giant cut orders for its first OLED smartphone by as much as 20-million units. Apple's stock has fallen more than 5% recently after it told investors it would no longer report iPhone unit sales and issued a lower-than-expected sales forecast for the Christmas quarter. Apple also has its services business to help continue to grow revenue even if the iPhone falters.

Apple's suppliers have for days been sounding warnings about iPhone demand. In its investors earning call for the Q4, 2018 result, Apple's CFO Luca Maestri had cautioned that going forward the company would have "uncertainty around supply and demand balance", and are also facing "some macroeconomic uncertainty, particularly in emerging markets".

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Due to the high average selling price of each iPhone model, Apple to some extent is shielded by downturns in global consumer demand. Apple's iPhone XR starts at Rs 76,900 in India, the iPhone XS at Rs 99,900.

The report repeats earlier claims that iPhone XR production will be cut by a third, though the reduction in iPhone XS and XS Max orders don't appear as severe.

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