Nikkei: Apple warns suppliers of 20% drop in new iPhone parts orders

“Apple has asked its supply chain to prepare around 20% fewer components for iPhones debuting in the latter half of 2018, taking a cautious approach toward smartphone shipments compared with last year’s orders, industry sources say,” Nikkei reports. “‘Apple is quite conservative in terms of placing new orders for upcoming iPhones this year,’ one of the four sources, who is in the supply chain, told the Nikkei Asian Review. ‘For the three new models specifically, the total planned capacity could be up to 20% fewer than last year’s orders.'”

“The U.S. company last year placed orders to prepare for production of up to 100 million units of the new iPhone 8, iPhone 8 Plus and iPhone X, but this year Apple currently expects total shipments of only 80 million units for new models, two people said,” Nikkei reports. “The U.S. tech titan intends to introduce three new iPhones in 2018. Two will feature the costly organic light-emitting diode screens like the iPhone X, while a cost-effective model keeps the liquid crystal display screen used by the iPhone 8 range. All three models would carry the TrueDepth 3D sensing camera system to activate Face ID similar to the iPhone X model, industry sources say.”

“Apple suppliers are undergoing the verification process for the new iPhones this month, one source said,” Nikkei reports. “Foxconn remains the largest iPhone assembler for the upcoming models in 2018. The company will handle all of the 5.8-inch OLED smartphones, while also holding shares of 80% to 90% for the 6.5-inch OLED model and a 30% order allocation for the LCD version, according to Yuanta Securities Investment Consulting’s supply chain checks. Pegatron, a smaller compatriot to Foxconn, looks to secure 60% of the 6.1-inch LCD offering and 10% to 15% of the 6.5-inch OLED model, while Wistron snares the rest of the orders for this year’s new iPhones.”

Read more in the full article here.

MacDailyNews Take: Use this “news” and whatever effect it produces, if any, accordingly.

Surely those administering Apple’s buyback programs and Warren Buffett, among others, are smiling right now.

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First quarter U.S. smartphone sales declined 11% YOY, Apple iPhone sales grew a record 16% YOY – May 22, 2018
Apple’s iPhone X remained the world’s best-selling smartphone in March – May 18, 2018
Apple sells an iPhone X every three seconds in Europe – May 9, 2018
Canalys: Apple’s iPhone X was Europe’s No.1 smartphone in Q1 – May 9, 2018
Strategy Analytics: Apple’s iPhone X the world’s best-selling smartphone model in Q1 2018 – May 4, 2018
How did analysts and pundits got the iPhone X ‘panic’ story so very, very wrong? – May 4, 2018
Why was iPhone X so successful at $999 despite a slew of fake news? – May 2, 2018
Uh, yeah, about those iPhone X ‘concerns’ from analysts: Never mind – May 1, 2018
Apple beats Street with best Q2 ever – May 1, 2018
Apple’s iPhone X isn’t selling well – or is it? – April 21, 2018
Apple’s iPhone X to be discontinued this year, analyst claims – April 20, 2018
Morgan Stanley: Apple stock may fall on ‘materially’ weaker iPhone sales – April 20, 2018
Apple’s iPhone X made 5 times the profit of 600 Android OEMs combined – April 18, 2018
Apple’s iPhone captured 86% of global handset profits in Q417; iPhone X alone took 35% of global handset profits – April 17, 2018
Bernstein: Ams AG is biggest winner in Apple’s TrueDepth Camera system – April 10, 2018
Apple’s iPhone X is the UK’s most popular smartphone – April 9, 2018
Apple’s iPhone X sales continue to disappoint, some analysts say – March 22, 2018
Ignore the iPhone X naysayers – March 10, 2018
Will the naysayers admit they were wrong about Apple’s iPhone X? – February 5, 2018
Do iPhone X sales spell trouble for Apple? – January 30, 2018
Apple supplier says report of iPhone X production cuts was overstated – January 30, 2018
Another January, another misleading iPhone supply cuts story from Nikkei – January 29, 2018
Apple stock drops after Nikkei report of iPhone X production cut – January 29, 2018
Reports of Apple cutting iPhone X orders make no sense – January 2, 2018
Apple stock tumbles on one poorly-sourced report of low iPhone X demand – December 26, 2017
Apple and suppliers shares drop on report of weak iPhone X demand – December 26, 2017


    1. The accuracy of Nikkei….

      Nikkei January :
      ” Apple Inc has notified suppliers that it will halve its iPhone X production target for the first quarter to around 20 million units, Nikkei reported on Monday without citing a source.

      The cut was prompted by slower-than-expected sales in the holiday shopping season in Europe, the United States and China, Nikkei reported”


      Canalys :

      “This made it (iPhone X) the world’s best-shipping smartphone model over the holiday season. Adoption was driven by upgrade demand in operator-centric markets”

      May, Tim Cook : “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan”


  1. Another way to interpret…Apple padded supplies to avoid delay in delivery on release initial sales will not be affected by supply…meaning sales will be higher due to increased availability at launch.

    It’s almost funny.

  2. Also note that it is June. Apple will release the next iPhone in Sept which is 3 months away.
    The new phone will have new components and whilst Apple may use the current gen phone, the volume required will likely be less.
    So lower supply volume at the end of a product lifecycle is not surprising. In fact it actually confirms that Apple have new products nearing the end of its development and production will start ramping up.

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