On the heels of a cut in earnings expectation for the final quarter of last year and comments by CEO Tim Cook about sales challenges in China, Apple has hit another hurdle. The Nikkei Asian Review reports that Apple has cut iPhone production plans by 10% for the quarter that stretches from January to March.
Reporting from Taipei, the editors wrote, “Apple is cutting its current production plan for new iPhones by about 10% for the next three months in a sign that the U.S. smartphone maker is expecting a further hit this year, just a week after its market-shaking revelation that it would miss revenue forecasts at the end of 2018.”
Among the details of the report is that iPhone production will fall to a range of 40 million to 43 million for the period, down from initial plans of 47 to 48 million.
The initial news about earnings sent Apple’s shares into a downward spin on top of all already sharp sell off. Apple was the most valuable U.S. company by market cap in September when its market value rose above $1 billion. The stock has fallen 21% in the last six months, and dipped behind Microsoft and Amazon.com by this measure.
Experts expect Cook does not have an easy turnaround in front of him. Rival Samsung says it has also had sales trouble in China. Local smartphone manufacturers hold such large market share that it is squeezing foreign companies out, particularly because the price of the iPhone is higher than homegrown products.
Apple has already begun to resort to tactics to help iPhone sales which would have been unimaginable when iPhone demand was soaring which has been the case for most of the tens years since it was introduced .The company has even started a trade in program to effectively underwrite the price of new models.
A 10% production cut is an indication Apple’s problems have extended well into this year.