Apple said to be cutting production of iPhone X

Apple made a big splash last fall when it unveiled its three newest iPhones — the iPhone 8, the iPhone 8 Plus, and especially, the iPhone X, with its wallet-busting $999 starting price tag. And on Thursday, we’ll all get a look at how well the iPhone X did during the 2017 holiday season when Apple reports its fiscal first-quarter results.

There probably won’t be too many surprises when Apple puts out its report. The final three months of any calendar year are always Apple’s best when it come to sales and earnings. That’s what happens when millions of consumers look to fill out their Christmas shopping lists and see that a new iPhone would fit perfectly under that tree or in that stocking.

But along with Apple’s update about its holiday season sales, what will get almost as much attention on Thursday will be what Apple says about its outlook for the first three months of this year. A major factor affecting that forecast will be Apple’s sales of the iPhone X, and reports have surfaced saying Apple might not be expecting to sell as many iPhone X phones as it had counted on for the period between January and March.

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The Wall Street Journal reported Tuesday that Apple is planning on producing 20 million iPhone X handsets during the first quarter of the year. That’s still a huge amount of iPhones, but when compared to Apple’s original production plans for 40 million iPhone X phones, that 20 million figure hints at possible trouble.

The Journal cited “people familiar with the iPhone supply chain” as saying Apple has cut component orders for the iPhone X by 60 percent for the quarter. Apple hasn’t said anything publicly about its iPhone X sales. But the device, while getting strong reviews for its technological advancements, has been beset by production issues, component shortages related to the phone’s face-recognition technology, and the hefty price tag.

Steven Milunovich, longtime Apple analyst with UBS, said in a research note that he expects Apple to produce 22 million iPhone X units during the first quarter of 2018, and that “most of (Wall) Street has come down from over 30 million units” toward the low-20 million iPhone X production range for the quarter.

Not all components makers are as down about the iPhone X production numbers. Murata Manufacturing, of Japan, reportedly said Apple has cut its supply orders, but not as severely as those of other iPhone X component providers.

Photo: Apple Senior Vice President of Worldwide Marketing Phil Schiller announces the new iPhone X at Apple’s special event in Cupertino on Sept. 12, 2017. (Courtesy Apple)

 

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