Apple has asked its parts suppliers to cut component supply by about 20 percent for the three new iPhones, which will be under production targeting to launch in the second half of 2018, compared to last year’s plans for its iPhone X and iPhone 8 models, the Nikkei Asian Review reported on Friday.
The California-based smartphone giant expects to ship 80 million new model iPhones this year, down 20 percent from what it had planned at the same time last year.
The report adds to concerns of weakening smartphone sales after years of scorching growth as sales stagnate in key growth markets such as China and users upgrade their phones less often.
Analyst firm IDC earlier said that the smartphone market is expected to dip 0.2 percent in 2018 to 1.469 billion units after declining 0.3 percent in 2017 — before returning to growth in 2019 and beyond.
IDC expects the global smartphone market is to grow roughly 3 percent annually from 2019 onwards with worldwide shipment volume reaching 1.654 billion in 2022 and a five year compound annual growth rate (CAGR) of 2.5 percent.
Research firm Gartner earlier said Apple has sold 54.058 million units of iPhones during the first quarter of 2018 for 13.7 percent market share as compared with 14.1 percent share in Q1 2017.
Anshul Gupta, research director at Gartner, earlier said: “Apple has struggled to drive significant smartphone replacements, which led to slower-than-expected growth in the first quarter of 2018.”
“With its exclusive focus on premium smartphones, Apple needs to significantly raise the overall experience of its next-generation iPhones to trigger replacements and lead to solid growth in the near future,” Anshul Gupta said.
“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year. For the three new models specifically, the total planned capacity could be up to 20 percent fewer than last year’s orders,” one of the four sources, who is in the supply chain, told the Nikkei Asian Review.
Many analysts have said the high price of the iPhone X – which sells for $1,000 and is the first iPhone to sport a new design since the launch of the iPhone 6 in 2015 – is also muting demand for the flagship.
Apple analyst Ming-Chi Kuo said this week that Apple might cut prices of new iPhones to debut later this year by as much as $300.
Shares of Apple suppliers AMS fell 6 percent, while those of Dialog Semi fell 4.1 percent US-based suppliers Advanced Micro Devices, Micron Technology Intel, Broadcom and Qualcomm were all down between 1 percent and 3 percent.
