A Chinese court ruled that Apple copied the iPhone 6 from a local manufacturer. (Photo : Getty Images)
Apple advised its parts suppliers that the slowing down of production of its flagships iPhone 6s and 6s Plus will continue this quarter as their year-over-year plummets continue. Upon launch, the iPhone 6s and 6s Plus kicked off with record-breaking sales, which extended during the holidays and gave Apple $75.9 billion revenue. After that, sales have declined and the flagships struggle to cope up with the records of its predecessors.
Apple was forced to adjust its inventories due to sluggish sales, reducing production for the January to March quarter by 30 percent. The iPhone maker is extending the production cut for another quarter or during the April to June period and notified its parts suppliers in Japan, Nikkei has learned. As production cut is extended for this quarter, it appears sales will keep on declining.
Even the March-released iPhone SE is not expected to trigger production levels as Apple has no plans to produce it in large volume. The sales growth of the new 4-inch iPhone is not expected to make up for that of its flagship siblings, the Japanese newspaper reported.
There was even an implication that the next iPhone would debut earlier than usual saying that production could take off as early as May if Apple decides to release the iPhone 7 prior to September.
While some market watchers and investors hope the 6s series sales would improve, the recent report suggests sales decline may continue before iPhone 7 debuts, Apple Insider reported.
The iPhone production cut would adversely affect Japanese suppliers, such as, liquid crystal display panel makers Sharp and Display, as well as memory chip provider Toshiba and camera image sensors supplier Sony. These manufacturers already operate at reduced rates, and because of production cuts, they may tend to downgrade earning forecasts for Q2 2016.
In 2013, Apple also made a similar move of cutting production, but this production cut could last longer. The Cupertino colossus ships 1.5 billion phones worldwide per year, but the market growth has slowed down.
The following video by wochit Tech reported the first production cut of Apple's flagships iPhone 6s and 6s Plus during the first quarter.
