Apple cut production of 3 newest iPhone models, shares tank

iPhone XRGetty

• Apple has cut productions orders for all three iPhone models launched in September, according to the Wall Street Journal.
• A handful of iPhone suppliers last week cut their outlook, citing a drop in demand from one of their biggest customers.
• Earlier this month, the smartphone giant reported underwhelming iPhone sales and said its holiday quarter would be on the low end of expectations.
• Shares have been under pressure recently, down more than 20% from its October peak.
• Watch Apple trade live.

Apple is sliding, down 4% on Monday, after a report said the company recently cut productions orders for all three iPhone models launched in September.

Lower-than-expected demand for the new products — iPhone XS,  iPhone XS Max, and iPhone XR — and Apple’s decision to offer more models have made it hard to predict the number of units it has to produce, the Wall Street Journal reported, citing sources familiar with the matter.

Shares have been under pressure recently — down more than 20% from its October peak — amid Apple’s waning iPhone demand. Earlier this month, the smartphone giant reported underwhelming iPhone sales and said its holiday quarter would be on the low end of expectations. It also decided to stop posting unit sales for iPhones, iPads, and Macs.

And last week, a handful of iPhone suppliers, including the main Face ID technology provider Lumentum and iPhone radio-frequency chip supplier Qorvo, cut their outlook, citing a drop in demand from one of their biggest customers while not specifically name Apple.

With investors speculating that all these signs pointed to weakness in new iPhone sales, the Journal’s sources detailed that Apple in October cut its production plan for iPhone XR, the cheaper model, by up to a third of the nearly 70 million units it had asked some suppliers to produce between September and February. And over the  last week, Apple told several suppliers that it cut its production plan again for the iPhone XR, sources added.

The company started selling its latest phone generation, the iPhone XS and XS Max, in September and the XR model in October.

With Apple tumbling, and other tech giants taking a beat, the tech-heavy Nasdaq 100 index on Monday plummeted more than 3.3%, on pace for it’s lowest close since the beginning of May.

Apple is up 8% this year.

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