Apple stock dropped sharply today after reports that the iPhone maker has cut iPhone orders yet again. It seems the iPhone 6s lineup is the one Apple Inc. (NASDAQ:AAPL) would like to forget as this has been a recurring theme since it was unveiled this past fall. This at least the third time we’re hearing of a production cut for the iPhone 6s lineup.
AAPL extends lower iPhone order
Nikkei reports that Asian parts suppliers were told that Apple Inc. (NASDAQ:AAPL) plans to continue its plan of lower iPhone production during the April to June quarter because of slow sales. The company has been adjusting its inventories since the iPhone 6s lineup came out in October as more and more reports suggested that sales have not been going well.
According to Nikkei, Apple Inc. (NASDAQ:AAPL) cut iPhone production for the January to March quarter by approximately 30% compared to last year’s first calendar quarter. The website also reports that the production cut may go on longer than the one we saw in 2013, which was the last time iPhone sales struggled. Apple unveiled the new lower priced iPhone SE recently, but apparently it doesn’t plan to produce large volumes of the smaller mid-range handset. We heard reports previously that Apple wasn’t planning for a huge response to the iPhone SE, so Nikkei’s report today supports that.
The website also reports that if Apple Inc. (NASDAQ:AAPL) launches the iPhone 7 lineup earlier than possible, then suppliers could start producing parts for it late next month.
Apple stock slumps even though iPhone sales were expected to slow
Shares of Apple stock dipped 1.91% to $109.95 following the report from Nikkei. However, as 9to5 Mac notes, the company tried to prepare investors for slow iPhone sales. Management said earlier this year that they should expect sales of the company’s smartphones to stall for several reasons. For one thing, global growth in smartphone sales in general is beginning to slow. Also many fans may be holding out for the iPhone 7, and it’s not uncommon for the “S” model years to not do as well as the regular numbered years.
Analysts have been debating for some time about whether iPhone sales declined or just grew more slowly during the March quarter. We’ll find out later this month when the company releases its next earnings report and get some clues about what to expect for the June quarter. Management usually releases a revenue guide, so that should give us some idea about how iPhone sales are going.
Reports have suggested that the iPhone SE isn’t going over so well, at least in some parts of the world. China, however, seems to have been happily gobbling up the mid-range iPhone, signaling that the device might do better in developing markets rather than the U.S.
Will the iPhone 7 do better?
Analysts and Apple Inc. (NASDAQ:AAPL) itself have emphasized that there is still plenty of opportunity in upgrades as a large percentage of iPhone users are still using one of the older models (iPhone 6 or older). The tech community has a habit of building up expectations for the next flagship model, and this year is no different. Among the rumors we’ve been hearing is that the iPhone 7 may have a Smart Connector, which the iPad Pro already has. It connects smart keyboards to tablets, so it seems a bit odd that the iPhone 7 would have one, but if it does, then Apple might be planning something big in the area of smartphone keyboards.
Another persistent iPhone 7 rumor is that the device will have a dual camera system, and this is one rumor that just isn’t losing steam. It’s looking more and more likely that this rumor is true, but if it isn’t, then it could be a huge letdown not only for fans but also investors, who might reflect their discontent in Apple stock by selling. A lot’s at stake with the iPhone 7 because it’s coming the year after an exceptionally weak year for iPhone sales.