With demand falling short of expectations, Apple’s flagship duo remains in limbo even during the holidays. It’s led to another major decision that impacts all members of the supply chain.
Apple has decided to cut production on the iPhone XS and the iPhone XR, according to DigiTimes. It’s the second time in recent weeks that the Cupertino-based company told suppliers to expect reduced orders. Shortly after the latest iPhone models were released, Apple started experiencing weak demand despite big-budget advertising campaigns for both.
In the report, multiple partners are named. Largan Precision, which offers the iPhone’s camera lens, lowered its revenue estimate for the fourth quarter. Meanwhile, Career Technology already laid off more than 100 employees in an effort to save money.
Taiwan Semiconductor Manufacturing Company, however, doesn’t feel any heat from Apple’s decision. It has picked up additional clients to create chips based on the 7nm process.
There isn’t much for Apple to worry about at this time, though. Plenty of cash sits in the bank, and no one will doubt the iPhone remains the world’s most popular smartphone in 2019. Currently, it’s just a tumultuous period for sales.
The downward trajectory for the iPhone XS and the iPhone XR could be surprising to some observers, but it’s an overall shift for the mobile industry. Hardware sales are slumping, which is why various companies are pushing toward ambitious designs and a reliance on software sales. Apple isn’t any different, putting its focus on services that generate monthly revenue.
Apple did confirm it’ll no longer share unit sales, and that’s worrying for investors. The unit sales for iPhone, iPad, and Mac were always a bright spot in earnings reports and highlighted transparency.
We’ll see how Apple continues battling this trend in 2019. The iPhone X re-entered production this month, and the iPhone XR saw its price get knocked down in Japan. It’s unusual for these types of things to occur for Apple, but revenue needs to stay strong.