iPhone production is being cut for the second quarter due to slow sales, according to overseas Apple parts suppliers. Apple itself has said that sales of the iPhone were slowing and they failed to meet some Wall Street expectations last quarter. iPhone production was also cut the last quarter prompting many to question Apple’s position in the market. Japanese parts suppliers for the iPhone have been informed of the production cut as have other suppliers around the world. With the release of the iPhone SE, Apple was hoping to grab the attention of millions of upgrade hold-outs who did not want a larger screen phone.
“Based on our survey work and analysis, we believe Apple is maintaining strong share of the premium-tier smartphone market,” Canaccord analyst Michael Walkley said in a report Wednesday. “However, given the similar form factor for the iPhone 6S and softer smartphone global demand trends, we anticipate down year-over-year iPhone sales for the remainder of fiscal 2016.
While initial sales of the iPhone SE should help offset a portion of slowing overall iPhone sales, we anticipate down year-over-year iPhone sales for the next three reported quarters. Longer-term, we believe the current iPhone 6 and iPhone 6S products have enabled Apple to materially increase its share and installed base of the premium-tier smartphone market with Android users switching to the iPhone.”
An iPhone production cut not only hurts Apple but it hurts their overseas suppliers as well. Japanese companies like Sony, Sharp, Japan Display, and Toshiba all produce parts for the iPhone and continued production cuts aren’t exactly what they want to see either. The iPhone 7 should be debuting in September so it will be interesting to see what Apple has in store to try and entice buyers into picking up their latest device.
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