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iPhone shipments to fall by 20% this year – report

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Apple will ship 20 percent fewer iPhones in 2018, Japanese financial daily the Nikkei reported on Friday, citing industry sources.

According to the report, Apple asked suppliers to reduce component production by 20 percent for three new iPhone models, scheduled for the second half of 2018, compared to last years plans for its iPhone X and iPhone 8 models.

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“Apple is quite conservative in terms of placing new orders for upcoming iPhones this year. For the three new models specifically, the total planned capacity could be up to 20 percent fewer than last years orders,” Nikkei wrote quoting industry officials.

Shares in Apple plunged about two percent on the report; its suppliers AMS and Dialog Semi tanked six percent and 4.1 percent respectively.

“This news needs to be viewed in the context of Apple probably being overly optimistic last year in relation to the prospects for its new phones, leaving it with excess inventory in the first part of this year,” Atlantic Equities analyst James Cordwell said, as quoted by Reuters.

“As the improvements made to the iPhone each year become increasingly marginal it may become more difficult to convince consumers to pay up for the latest model, when an older generation device is effectively just as good,” Cordwell added.

Despite the media reports that demand for the $1,000 iPhone X has fallen, Apples market cap has continued to rise and is approaching $1 trillion.

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