Apple would have reduced its production orders for the iPhone XS and the iPhone XR despite a lower demand than expected



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In recent weeks, Apple has reduced production orders for its latest iPhone XS, iPhone XS Max models and iPhone XR due to "lower demand than expected", among other reasons, according to anonymous sources cited by The Wall Street Journal.



The report states that the cuts in production hit the iPhone XR It's Apple that would have reduced its production plan by "nearly a third of the estimated 70 million units" that it had asked some suppliers to produce between September and February, either a reduction of up to 23.3 million units. so.

Last week, Apple reportedly told several suppliers to cut its production plan for the first time. iPhone XR, as it attacks the mature smartphone market and the growing competition from Chinese suppliers such as Huawei.

The production cuts would have "caused further frustration" among iPhone suppliers and "raised concerns about Apple's ability to forecast demand."

We have already heard this story before. Last year, many reports referred to the iPhone X as a "failure", a "disappointment" and a "failure". Another report said that the iPhone X "has not lived up to the hype". Yet the iPhone X has become not only the best-selling iPhone at Apple, but also worldwide.

Apple also announced a record business turnover of $ 61.5 billion for the iPhone during the launch quarter of the iPhone X, so the device was anything but a failure.

Apple CEO Tim Cook has rejected this type of report in the past. At a call for results in January 2013, he noted that the company's supply chain was very complex and that one should not draw conclusions on single data points:

Even if a particular data point was factual, it would be impossible to interpret this data point as to what it meant for our company. The supply chain is very complex and we have several sources of supply. Yields may vary, vendor performance may vary. There is a long list of things that can make a single data point a very good proxy for what is happening.

Apple's chief financial officer, Luca Maestri, also warned of the attempt to determine iPhone demand based on potentially misleading reports on the supply chain.

It is possible, however, that Apple has more and more trouble predicting demand for the iPhone. The report released today claims that Apple was "overly optimistic" compared to its initial production forecast for the iPhone X, which it then reduced "from about 20 million units "for the first three months of 2018.

Unfortunately, iPhone sales will be less transparent as Apple announced that it would no longer disclose iPhone unit sales in its earnings reports as of the first quarter of its 2019 fiscal year.

Justifying the move, Maestri stated that unit sales are "not particularly relevant to our company at this stage" because they "are not necessarily representative of the underlying strength of our business". He added that Apple can provide qualitative feedback on unit sales if the information is valuable to investors.

However, Apple will still disclose iPhone revenues on a quarterly basis, and any significant decline in this amount from one year to the next would help indicate if iPhone XS, iPhone XS Max and iPhone XR the demand is really lower than expected.

AAPL is down nearly 15% since Apple's earnings report released Nov. 1.

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