Report: Sluggish sales lead Apple to continue slashing iPhone production in the current quarter

Report: Sluggish sales lead Apple to continue slashing iPhone production in the current quarter
Apple's shares are taking a little hit this afternoon following a report that sluggish iPhone sales are leading Apple to continue cutting production of its smartphone during the current quarter. During the January-March period, Apple produced 30% fewer iPhones when compared to the same quarter a year earlier.

Apple has already informed its parts suppliers that it is continuing to cut production of the iPhone in the current quarter. Slow sales of the Apple iPhone 6s and Apple iPhone 6s Plus are the reason why Apple has taken an axe to its production schedule. And Apple does not plan to manufacture enough 4-inch Apple iPhone SE handsets to make up for the drop in the production of its flagship models.

The entire smartphone market is expected to experience its slowest growth ever this year. 2016 could show a year-over-year increase of less than 10% for the first time. In addition, when Apple reports its fiscal first quarter earnings later this month, it is expected to report a decline in year-over-year iPhone sales for the first time ever. Analysts expect Apple to report that it sold 54.6 million iPhone units from January through March, compared to the 61.2 million iPhones it sold during the same quarter a year ago.

Apple's shares are down $2.25 (2%) on the news, currently trading at $109.85.

Thanks for the tip!

source: Nikkei

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103 Comments

1. manojmcn

Posts: 634; Member since: Jul 16, 2015

Only 54.6 million in 3 months? Any company except Apple n Samsung should feel happy by the numbers. BTW master strategist Cook will release iphone 7 in more versions to manage sales later this year - iphone 7 PRE, iphone 7 PRO , iphone 7 AIR and iphone 7 POOR ( or SE). Excitement in the air...

7. 2.5GHz

Posts: 270; Member since: Apr 03, 2016

54mil sales is "only", compared to the amout they usually sell per quater.

80. MSi_GS70 unregistered

like they has no enough .. it is never enough.. greedy ppl doesn't know where or when to stop

98. coldspring22

Posts: 349; Member since: Feb 28, 2015

Well company has to be greedy... since it's basic purpose is to increase revenue and profit. However, no company is so greedy like apple which pursue pure profit with laser guided precision, even at cost of losing market share.

95. sgodsell

Posts: 7433; Member since: Mar 16, 2013

I think the smart people have finally caught onto the Apple propaganda and overpriced Apple products, which is also contributing to lower sales of Apple products.

11. Finalflash

Posts: 4063; Member since: Jul 23, 2013

By themselves the numbers are good, but what they imply is what Apple and everyone holding their stock if afraid of. The market is saturated and people are not replacing their phones as fast as they used to. This problem hits Apple the hardest seeing as how their entire business pretty much runs off the iPhone. Others like Samsung, LG, Google, MS, etc. have other viable software or hardware businesses. Apple has nothing even close to their iPhone and therefore, will suffer horrendous loses if they do not at least keep up with sales. Dropping sales mean lower profits, lower profits mean corner cutting to reduce costs and pinching pennies, cutting corners means lower quality, and then overall decline in everything. The Apple Watch continues to flounder as well as the iPads, while Apple's car dreams will likely remain that way for a while.

22. 2.5GHz

Posts: 270; Member since: Apr 03, 2016

Correct. 75% of Apple's profit comes from the iPhone.If the iPhone sales continue to decline, Apple is finnished.

51. k4ever

Posts: 240; Member since: Oct 08, 2014

We all know that Apple is a one trick pony. The iPhone is the only product Apple has that sells well with high margins. Macbooks and iMacs are overpriced jokes (no dedicated graphics cards on most models, soldered on parts, lack of ports) made for people that just want to look good while they use the free wifi at Starbucks to look for a job. IPad sales have tanked. The iPad Pro is another overpriced joke that comes nowhere near replacing a similar priced laptop or even a netbook. The Apple Watch is a disaster that I wish tech "journalist" will quit writing stupid stories about. Apple Music is a sorry clone of Spotify that Apple lost 3 billion dollars buying (Beats purchase). I'm so tired of hearing about the iPhone. The only thing Apple has done with the iPhone in the last few years is copy old technology from Samsung and Google (Android), then market it is new and innovative. The iPhone is still a good phone, but it is nowhere near as advanced as its Android competition. I am also tired of the uninformed Apple users (fanboys) worshipping the company as if it were a cult.

54. 2.5GHz

Posts: 270; Member since: Apr 03, 2016

iPhone sales won't sustain Apple forever.

69. MotoFoner

Posts: 34; Member since: May 11, 2015

Not to mention the boondoggle that will be the horrific krApple headquarters - if it ever gets finished - that will end up being a vacant eyesore used for swap meets, vandalized and arsoned by homeless and drug addicts, etc. I love it! Eff Cook and Joan-ee Ives!

79. MSi_GS70 unregistered

Please Huawei is the next for the smartphone throne give chance others and DON'T be selfish apple !!

94. leonchik99

Posts: 3; Member since: Oct 15, 2015

nice one

96. coldspring22

Posts: 349; Member since: Feb 28, 2015

You are making mistake of comparing company's fortune to a personal fortune. For a public company, the past doesn't really matter. Everything is about future growth. If Apple sales growth is zero or even declining, Apple stock will suffer for it, and in particular, Apple brass will go into panic mode, because it's their head that's on the chopping blocks.

3. tyrionTheWise unregistered

No one is safe. Good for consumers.

5. 2.5GHz

Posts: 270; Member since: Apr 03, 2016

Atleast, it's good for the Android consumers specifically.

9. bucky

Posts: 3790; Member since: Sep 30, 2009

Why is that?

15. justrt

Posts: 446; Member since: Jul 10, 2014

It's good for consumers, because of more competition. If we see Apple lowering their prices it will be good for their consumers too. It's good for Android consumers, because the stronger the platform is, the more developers, more quality apps, more joy and pride per user.

18. Tziggy14

Posts: 624; Member since: Sep 02, 2014

So you wanna see Apple devalue their premium brand and profit margins by lowering prices to gain market share? I highly doubt Apple will do that if they don't want angry shareholders yelling at Cooks face during earnings.

21. palmguy

Posts: 982; Member since: Mar 22, 2011

Ha!!!!! Apple lowering prices? When pigs fly.

23. tyrionTheWise unregistered

27. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

The 5S price likely lower do to the release of the SE. Maybe? $600 for a 3 year old phone is ridiculous!!!!! Here is what I know. Apple can reduce the value of the phone to deal with the difference in currency. There is no reason for ANY phone, I don't care if its a top model or not to cost $1300 in any country. PERIOD!!!!!!! Samsung doesn't have a phone that costs $1300 in India. Now I assume the Korean Won probably has a higher value vs the USA Dollar when it comes to the Indian Rupee (Zelda). But $1300 for a phone is pure fraud for a phone that costs $250 to make.

42. techbuttcheex

Posts: 204; Member since: Jul 25, 2015

They were charging 600 for the 5s as late as Fall 2015. I was thinking about replacing my old 5s at the time but could not abide that price.

56. yyzamin

Posts: 382; Member since: Aug 26, 2015

In all fairness in Australia Prices as follows: S7 edge 32gb is $1249aud iPhone 6s 64gb $1229aud Got nothing to do with currency. Its what people are prepared to pay. Sounds like there is a mass disproportionate of wealth in India.

99. k4ever

Posts: 240; Member since: Oct 08, 2014

You compared the price of an S7 Edge to an iPhone 6s. That's dishonest. The S7, not the S7 Edge, competes with the iPhone 6s and the S7 Edge competes with the more expensive and bigger iPhone 6s Plus.

113. AlikMalix unregistered

But he compared iphone 64gb to s7 edge 32gb... all's fair...

115. k4ever

Posts: 240; Member since: Oct 08, 2014

No it's not. On the surface it looks like you get more storage with the iPhone then you do with the S7 for the same price. In reality you are getting the smaller model (screen size) of the iPhone with more storage vs the larger model of the S7. If you compare both large models with the similar storage capacity (iPhone 6s Plus vs S7 Edge), the S7 Edge is way cheaper. As a matter of fact, for the price of a 16GB iPhone 6s Plus, you can get a 32GB S7 Edge. Dishonest comparison!

24. 2.5GHz

Posts: 270; Member since: Apr 03, 2016

When iPhones sales decline terribly, Apple will be forced to lower it's prices worldwide.

4. meanestgenius

Posts: 22218; Member since: May 28, 2014

While 56 million + handsets in a quarter is still great, no one, not even Apple, is immune to the market slowdown. Between that and increased competition from Android vendors, Apples iPhone sales were bound to take a hit. Definitely want to see how iPhone sales fair with the release of the iPhone 7.

12. gaming64

Posts: 234; Member since: Mar 22, 2016

I just don't see the fine line of innovation and reason to upgrade on smartphones anymore. This eliminates the need to buy new smartphones if you have any from 2015.

32. Unordinary unregistered

Obviously. The mobile device is like a broom, or rake, or shovel. You can add features to it like a special bend for snow shovels to releave weight (leverage), or add more bristles to a broom to lessen its workflow to make things easier, but at the end of a day.. They're still a shovel and broom. The same applies to mobile devices.

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