Apple cuts production plan for new iPhones by 10% for first quarter

People look at iPhones at the World Trade Center Apple Store during a Black Friday sales event in Manhattan New York City US

Apple cuts production plan for new iPhones by 10% for first quarter

A week after issuing a sales warning, Apple reportedly slashed its iPhone production for January to March by 10 percent.

The smartphone giant made the request before last week's shock reduction in its sales outlook, "Nikkei" said, citing unidentified sources as saying.

In his January 2 letter, Apple's CEO drastically reduced the revenue estimate for 2019's first fiscal quarter, with the numbers going down to approximately $84 billion from the $89 billion and $93 billion figure presented in November 2018 to the company's investors. Cook blamed the shortfall on lower-than-expected demand from China over the Christmas and New Year holiday period.

Overall planned production volume of both old and new iPhones is likely to be cut to a range of 40 million to 43 million units for January-March, from an earlier projection of 47 million to 48 million units, the Nikkei reported, citing one source familiar with the situation.

While Cook suggested that pricing isn't an issue, Apple today offered Chinese vendors a price cut for all 2017 and 2018 iPhone models in an attempt to counter the declining sales.

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Rumor has it that Apple is scaling back its production plans for its most recent fleet of handsets - the iPhone XS, iPhone XS Max, and iPhone XR - by around 10%. The company said during its last earnings call in November that it would stop reporting iPhone unit sales when it reports its first-quarter results. Apple's revenue for the quarter was up 19.6% compared to the same quarter past year. The firm also projects another 3% decrease in smart phone shipments during the current year to below 400 million units for the first time in at least five years. The newest iPhone lineup isn't selling as well, and that's having a huge impact.

According to CNN Money, the 33 analysts, offering 12-month forecasts regarding Apple Inc's stock price, have a median target of $215.00, with a high estimate of $300.00 and a low estimate of $165.00.

Michael Grothaus writes about five ways to improve Apple services, a drum that Tim Cook has been beating for the past couple years.

Investors knocked about $75 billion from Apple's market value last Thursday.

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