Apple cuts production orders for all new iPhones

Daniel Fowler
November 21, 2018

It was only a few weeks ago when we heard that Apple had slashed production of the iPhone XR as demand failed to meet expectations.

All that said, it likely wouldn't affect Apple too much. Although, Apple has fallen down from its previous $1 trillion market value. The release came after the company put the $999 iPhone XS and the $1,099 iPhone XS Max on the market in September.

According to the report, "Lower-than-expected demand for Apple Inc.'s new iPhones and the company's decision to offer more models have created turmoil along its supply chain and made it harder to predict the number of components and handsets it needs, people familiar with the situation say". Many iPhone suppliers have cut their quarterly profit estimates after a large customer, which is nearly certainly Apple, reduced its orders.

The report said Apple's move to end the disclosure of unit sales data for the iPhone has also complicated matters for the company's suppliers.

Now, Goldman warns that Apple could be losing its shine - and its power to price its smartphones higher than the competition.

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The iPhone XR had been forecast by analysts to be the most popular model in the new iPhone lineup-thanks to its starting price of US$1299 (compared with the $1629 iPhone XS and $1799 iPhone XS Max) and its 6.1-inch display (larger than the 5.8-inch iPhone XS).

"The laboratory of the market now points to Apple being at the limit of their price premium for the iPhone", he wrote.

They also add that investors may be overvaluing Apple's famous ecosystem, which keeps users buying new Apple products when their old ones wear out, because of a United States-focus.

Apple did not immediately respond to a request for comment. (NASDAQ:AAPL) are not poised for bigger and better things in the coming year.

Goldman Sachs analyst Rod Hall slash his price target on Apple Inc.

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