Apple Said To Cut iPhone Production In Q1: Nikkei

Apple Said To Cut iPhone Production In Q1: Nikkei

A source at a parts supplier told Nikkei that the cut was "within expectations", suggesting that Apple's suppliers have been preparing to reduce their dependency on Cupertino.

KGI Securities analyst Ming-Chi Kuo forecasted a year-over-year production decline over the entire first half of 2017 in November. Consequently, Apple shares traded in red, plunging about 0.78%, during active trading yesterday.

Much of Apple's products are manufactured in China by Foxconn. The reason for the cut is to align supply with demand for the device following a calendar fourth quarter that was affected by holiday sales, deals on the latest iPhone models, and other things that threw off the desired balance in the marketplace.

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Apple will trim production of its iPhone family around 10% on the year in the first quarter of 2017, according to calculations by The Nikkei based on data from suppliers. The report stated that while iPhone 7 Plus has been considerably popular with the consumers, its camera sensors' shortage adversely impacted the tech giant's ability to meet demand this time.

"You don't want to see Apple fail at $118 and roll hard because then you're going to start hearing "double top, double top" because that's where it had trouble going back to late September", Ritholtz Wealth Management CEO Josh Brown said on CNBC's "Halftime Report" on Friday afternoon. Recent reports also noted that while Japanese demand has been strong, it can not make up for the overall sluggishness.

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