Taiwan's economic planning agency blames lack of innovation for poor Apple iPhone sales

It is no secret that Apple is experiencing weaker than expected sales of its most important product, the iPhone. It already initiated a trade-in deal that cuts the price of the iPhone XR and iPhone XS in a number of markets, and has cut the wholesale price of the 2018 models to third party resellers in China. Earlier this month, Apple cited weak sales in China as a reason why it had to cut its revenue guidance for the fiscal first quarter, which ended in December.

According to Digitimes, Taiwan's top economic planning agency, the National Development Council (NDC), said that the new iPhone models are selling poorly due to a lack of innovation. The comment was made last Thursday during a cabinet meeting.

Apple has reportedly informed its supply chain that it plans to cut production of the 2018 iPhone models by 10% for the calendar first quarter. That three month period runs from the beginning of January through the end of March. Taiwan is the home to several important iPhone suppliers including TSMC (chips), Largan Precision (camera components) and Foxconn (product assembly), which means that several big businesses there have a stake in how well the handsets sell.

Wall Street analysts now expect iPhone sales for the calendar first quarter (Apple's fiscal second quarter) to plunge by as much as 20%. If that turns out to be true, only 41.8 million iPhone units will be purchased during the period, down from the 52.21 million rung up during the same period last year. However, since Apple is no longer reporting this information during its quarterly reports, this data will have to be estimated by analysts using anecdotal evidence.