Report: Apple to cut iPhone production by 10% in the first quarter

Report: Apple to cut iPhone production by 10% in the first quarter
It would appear that Apple's suppliers are expecting Apple to cut production of its iconic smartphone by 10% in the calendar first quarter of 2017. That figure comes from Japan's Nikkei news agency after it crunched data from the iPhone supply chain. The reason for the cut is to align supply with demand for the device following a calendar fourth quarter that was affected by holiday sales, deals on the latest iPhone models, and other things that threw off the desired balance in the marketplace.

Apple thought it had learned a lesson last year when supplies of the Apple iPhone 6s and Apple iPhone 6s Plus grew at the end of the year. Looking to prevent a repeat, Apple ordered 20% fewer Apple iPhone 7 and Apple iPhone 7 Plus units for its first fiscal quarter ending in December. But that didn't stop the company from having to make the inventory adjustments that it is having to do now. Despite demand for the 5.5-inch iPhone 7 Plus, Apple has had an issue sourcing enough camera sensors for this model, which carries a dual camera setup in back.     

Apple has added an IP67 certification rating to both iPhone models this year, giving it long awaited protection from water. The iPhone 7 Plus has the aforementioned dual camera-setup on back, allowing photographers to make a blur in the background of photos. Despite these changes, improvements to the battery and the addition of the powerful A10 chipset, these new features don't seem to be enough to drive a hike in demand. And some consumers are still upset that Apple removed the 3.5-inch earphone jack from the new models.

For 2017, Apple is expected to produce a 4.7-inch Apple iPhone 7s and a 5.5-inch Apple iPhone 7s Plus, both using LCD glass. But a rumored tenth-anniversary model, code named Ferrari, could feature an OLED screen and a new design that includes an edge-to-edge display. Touch ID would be embedded in the glass.

source: Nikkei

Related phones

iPhone 7
  • Display 4.7" 750 x 1334 pixels
  • Camera 12 MP / 7 MP front
  • Processor Apple A10 Fusion, Quad-core, 2340 MHz
  • Storage 256 GB
  • Battery 1960 mAh(14h 3G talk time)
iPhone 7 Plus
  • Display 5.5" 1080 x 1920 pixels
  • Camera 12 MP / 7 MP front
  • Processor Apple A10 Fusion, Quad-core, 2340 MHz
  • Storage 256 GB
  • Battery 2900 mAh(21h 3G talk time)

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23 Comments

1. Ticklemyfancy

Posts: 214; Member since: Oct 09, 2016

Easier to create artificial demand.

3. Iodine

Posts: 1478; Member since: Jun 19, 2014

Easier to create actual loss of profit. Why should the most profitable company do that ?

18. sgodsell

Posts: 7212; Member since: Mar 16, 2013

This is the first year that I have ever seen carriers offer Apples latest flagship iPhones go for zero dollars. That explains everything right there. Apples greedy ways are finally catching up to them.

22. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

they have been free since pre-order and have not stopped being free for the base model. No one wants the garbage!

19. xondk

Posts: 1904; Member since: Mar 25, 2014

You are, of course, right in that aspect. Apple generally won't produce until the demand is there, its how they work. Unfortunately, the effect is that consumers think its 'rare' when its not.

4. threed61

Posts: 259; Member since: May 27, 2011

New demand in the US will be hard. Changes by carriers have made people aware of the true expense of these devices, and they are holding on to them longer.

9. joevsyou

Posts: 1091; Member since: Feb 28, 2015

ya that doesn't really work months after release. Judging inventory is a difficult job. Order to much = you got overstock and wasted inventory space which results in heavy discounts to clear space which means less profits. Worse case, supply goes unused and it's a total loss. Order not enough you lose sells and your potential customers run off to a competitor or worse your loyal fans gets upset at you and starts to second guess your brand

2. Tizo101

Posts: 524; Member since: Jun 05, 2015

but I thought they ran out of stock both this year and last year...

5. NarutoKage14

Posts: 1318; Member since: Aug 31, 2016

They did but only of the 128GB & 256GB models, the lower capacity and regular black models were not hard to find.

6. NoAllegiance unregistered

3.5 "inch" earphone jack... lol, is this a new standard?

7. Klinton

Posts: 1408; Member since: Oct 24, 2016

And if 'rumored tenth-anniversary model, code named Ferrari' turn out to be just a stock price BS?(like many other rumors before: liquid metal, TV set, Apple car, sapphire, many year so far- small bezels, iRing....) What will the US media do? No excuses again? LOL

8. cnour

Posts: 2305; Member since: Sep 11, 2014

Every year same story and Apple is always going up.

10. cmdacos

Posts: 4106; Member since: Nov 01, 2016

Xmas market share went down 5%. That's the opposite of up. Also, Apple plans a slow down every year at this time. This 10% cut is over and above the typical slowdown.

12. cnour

Posts: 2305; Member since: Sep 11, 2014

Keep dreaming

20. sgodsell

Posts: 7212; Member since: Mar 16, 2013

Cnour this is the first year in the history of Apple to offer their latest iPhones, which everyone knows that they were only released a couple of months ago. So explain to everyone why every iPhone carrier released a zero dollar iPhone? If the demand is there, then there is no need to drop the prices down. The one that is dreaming is you cnour.

23. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Especially after fans claim Sansung phone only were selline because of BOGO deals. Where the iPhone 7 was the first I saw carriers doing the same. The base iPhone has been free since day one. CNOUR, buying one to get one free, is not the ame as buy the first one because it is free!

11. Leo_MC

Posts: 7210; Member since: Dec 02, 2011

Wtf, Apple, the stocks in my country with the carriers are 0 for the plus model 2 months by now and 7 is only available in rose gold and sometimes - only sometimes - in silver, and you're cutting production?! Are you out of your mind?

13. cmdacos

Posts: 4106; Member since: Nov 01, 2016

Sounds like your country didn't get the memo. People want fashion AND technology now, not just fashion so Apple sales are slowing.

14. kiko007

Posts: 7493; Member since: Feb 17, 2016

Then explain why sales for everyone else are slowing down as well......

17. BullDozer

Posts: 154; Member since: Dec 18, 2015

Not true. Mostly problem for Appke and Samsung. Chinese manufacturers are growing extremely fast and are currently holding positions 3 to 5 in worldwide market share stats. Huawei will soon take 2nd place from Apple.

21. sgodsell

Posts: 7212; Member since: Mar 16, 2013

The last year the sales for Android and a number of OEMs continued to grow. Where as Apple the last 3 quarters fell. So kiko007, care to explain? In your case make up and push out lies.

15. Leo_MC

Posts: 7210; Member since: Dec 02, 2011

I don't give a rat's ass on what "people" want, I only care for what is good for ME. I have already took the necessary steps towards getting an iPhone and my only complaint is that I was not able to find one for 2 months now.

16. fyah_king unregistered

So the are cutting like 4 million phones for the next quarter.

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