Monday, January 2, 2017

Apple to cut iPhone production in Q1 2017

Apple was reportedly said to cut its production of the latest iPhone model to at least 10% for the first quarter of 2017 due to sluggish demand for the last quarter of 2016.

An analysis made by Nikkei, said that the tech giant has decided to trim down the production of the unit because of the slower than expected sales growth after its release.


The lack of interesting new features on the iPhone 7 and iPhone 7Plus has contributed to the slow growth of the model.

A survey was held among iPhone users and showed that around 50% of the existing iPhone users don’t actually upgrade every time a new model is released by the company, especially if the latest release does not have any drastic changes from the previous one.

It is not the first time for the company to cut production due to an overproduction of their latest model. During the first quarter of 2016, Apple has slashed production of the iPhone 6s and the iPhone 6s Plus due to accumulated inventory from the end of 2015. This led the company to control the production of the iPhone 7, which was released on September, by 20%.

Apple’s tendency to over-estimate sales every fourth quarter of the year can lead to annual adjustments made by the company.

According to several reports, the sales of the iPhone 7 continue with a strong performance, although its output is still weaker compared to previous models released by the company.

Meanwhile, Apple is said to expand its production unit and market in India starting 2017. Apple is partnering with Wistron to create an assembling plant in Peenya, India, a well developed industrial area in the region, which is located in the west of Bengaluru. The tech giant has been discussing matters with the Indian government, seeking incentives in order to set up a manufacturing unit in the region.

Apple’s expansion in India can help the company boost its prices and market presence in the region, since the extension will attract 12.5% additional duty for the imports.

Chinese company, Foxconn, which is Apple’s biggest manufacturer of its products, is said to have been included on Apple’s venture on expanding its manufacturing business in India.

Apple shares fell 0.84% during the midday trading in the Nasdaq stock index.

Apple has not yet commented on the news about its production cut but analysts and investors are all keen for an update from the company itself regarding the matter.


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