Apple has decided that it’ll order fewer smartphones than originally intended. In a report from the Wall Street Journal, the mobile industry’s stagnant growth and weak demand in China are cited as key motivators. The three-model lineup isn’t turning out to be nearly as successful as Apple expected, and suppliers are getting uneasy about their own revenues dropping.
Both the iPhone XS and the iPhone XR are getting reduced orders in production. Suppliers are taking a hit, and soon there could be layoffs at these companies.
So far, multiple big-name suppliers lowered their revenue forecasts as 2018 comes to an end. The new iPhone models were projected to be global hits, but none of them are generating sales at a satisfactory pace and thus suppliers get left with unused components and an idle workforce.
The effect on Apple’s bottom line isn’t as brutal. Aside from selling older iPhone models that are less expensive, the Cupertino-based company makes a large amount of money on services. It’s a multi-faceted approach that allows Apple to generate revenue in different areas.
Meanwhile, Apple has gone dark on unit sales for future earnings reports. It’ll no longer disclose how many units of iPhone, iPad, and Mac are sold.
In early 2019, we’ll get a better idea of what’s actually going on. Apple won’t tell the world about its unit sales, but an overall description of how each product line did will say a lot.
