Apple Orders 10 Percent Production Cut for New iPhone Models

Grant Boone
January 11, 2019

Foxconn, formerly known as Hon Hai Precision, is nearly as well known as Apple these days and is the rather infamous Taiwanese-based manufacturer of iPhones and other Apple-designed products.

A new report from the Nikkei's Asian Review claims that Apple has asked its suppliers for 10% fewer new iPhones than expected.

The firm's primary plant is located in Zhengzhou, China and in the past has employed as many as 350,000 Chinese workers to build up to half a million iPhones a day, good for 350 phones per minute. Those numbers are significantly lower than the 47 to 48 million units Apple originally wanted to manufacture for the first three months of 2019. The surprise warning triggered a broad sell-off in global stock markets.

Market research firm Canalys estimates shipments fell 12 percent in China past year and expects smartphone shipments in 2019 to dip another three percent, to below 400 million for the first time since 2014.

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On top of it all, last month Apple was also ordered by the Fuzhou Intermediate People's Court to stop selling and importing all iPhone models from the 6s to the X in China after concluding that Cupertino was infringing on two Qualcomm patents. Apple took a direct hit from the issue and even lost its number one spot to Microsoft who in turn lost it to Amazon.

The report comes after chip suppliers Samsung Electronics and Skyworks Solutions flagged weak first-quarter chip demand for smartphones.

As Chinese demand has faltered, Apple has increased focus on India, which recently overtook the United States as the world's second-largest smartphone market.

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