Apple Inc is expected to >cut production of its latest iPhone models by about 30 per cent in the January-March quarter due to mounting inventories, the Nikkei reported, rattling the nerves of investors in the U.S. giant’s Asian suppliers.
As inventories of the iPhone 6s and 6s Plus have piled up since they were launched last September, production will be scaled back to let dealers go through their current stock, the business daily reported.
The report prompted a 2.5 per cent drop in Apple shares, which have lost about a quarter of their value from record highs in April, reflecting worries over slowing shipments.
Shares in the mainly Asian makers of the iPhones’ screens and chips were also sharply lower on Wednesday.
“This is an eye-opening production cut which speaks to the softer demand that Apple has seen with 6s out of the gates,” FBR Capital Markets analyst Daniel Ives said. “The Street was bracing for a cut but the magnitude here is a bit more worrisome.”
Apple was not immediately available for comment.
In China”s Henan province, the Zhengzhou capital city government said on its website this week it had awarded 82 million yuan ($12.53 million) in subsidies to companies under Foxconn, a major iPhone assembler.
