Around 60% of Apple’s yearly revenue is generated from the sale of the iPhone. However, it is believed that they will be allegedly reducing orders of the iPhone 6s and iPhone 6s Plus to suppliers by as much as 30 percent this quarter. A recent report by the Wall Street Journal states that Apple’s iPhone production is slowing down. According to “three sources familiar with Apple’s supply chain”, the company has reduced orders to suppliers, leading to layoffs and idle capacity at Apple’s Chinese suppliers. The claims are backed up by a $12 million grant given to Foxconn, Apple’s primary iPhone manufacturer, by the Chinese government in order to minimize layoffs.
Apple originally planned to manufacture almost as many units as of the iPhone 6 and iPhone 6 Plus as they made in this quarter of last year, but with the recent change in their plan, retailers have more opportunity to burn through the units they already have in stock. Suppliers, meanwhile, are left to suffer.
“Inventories of the two models launched last September have piled up at retailers in markets ranging from China and Japan to Europe and the U.S. amid lackluster sales,” according to the report from Nikkei Asian Review. “Customers saw little improvement in performance over the previous generation, while dollar appreciation led to sharp price hikes in emerging markets.”