​Apple to cut iPhone 6s, iPhone 6s Plus production by 30 percent: Report

Lacklustre sales of its latest iPhone models is reportedly forcing Apple to reduce production so it can complete an inventory adjustment in calendar Q1.
Written by Aimee Chanthadavong, Contributor

Apple has reportedly warned its Japanese and South Korean parts suppliers that it plans to reduce the production of its iPhone 6s and iPhone 6s Plus by around 30 percent in the first quarter of the 2016 calendar year.

The Nikkei has reported that the tech giant has been experiencing lacklustre sales of its latest iPhone models compared to its previous models, because customers saw little improvement in performance on the previous iPhone generation. Dollar depreciation has also led to share price hikes in emerging markets.

This has resulted in retail inventories piling up since the devices' launch in September in markets including China, Japan, Europe, and the United States, according to the Nikkei.

The Nikkei said the cutbacks are likely to affect liquid crystal display panel manufacturers Japan Display, Sharp, and LG Display, as well as image sensor supplier Sony and electronic parts maker TDK, Alps Electric, and Kyocera.

However, production is expected to return to normal again by the second quarter of the calendar year, once inventory adjustment is complete.

This is not the first time Apple has slashed iPhone production, however, with the Nikkei noting that a similar incident in 2013 forced Apple-dependent parts suppliers to find ways to cope.

In October last year, the company reported that iPhone sales had powered the company's quietest fiscal quarter, where 48 million were sold in Apple's fourth quarter. The tech giant reported fiscal fourth-quarter net income of $11.1 billion, and revenue of $55 billion, up 22 percent year over year.

Apple chief executive Tim Cook at the time believed the momentum was going to continue into the December holiday season.

"Fiscal 2015 was Apple's most successful year ever, with revenue growing 28 percent to nearly $234 billion. This continued success is the result of our commitment to making the best, most innovative products on earth, and it's a testament to the tremendous execution by our teams," Cook said.

"We are heading into the holidays with our strongest product line-up yet, including iPhone 6s and iPhone 6s Plus; Apple Watch with an expanded line-up of cases and bands; the new iPad Pro; and the all-new Apple TV."

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