Apple is Further Reducing iPhone Orders Due to Low Demand

iPhone Xs Max back

DigiTimes report claims that Apple has further reduced its iPhone production orders. This is the second wave of order reduction from Apple that will affect almost all of its suppliers.

TSMC, which supplies Apple with its 7nm A12 Bionic chip, will make up for the loss of orders as its 7nm foundry is also being used to fabricate Huawei’s Kirin 980 chipset and Qualcomm’s upcoming Snapdragon 8150 chip. The same foundry will also be used by AMD for its new Radeon Instinct accelerator chips.

On another front, as Apple has reportedly enforced a second wave of order reduction in the wake of weaker-than-expected sales for its new iPhones, many other Taiwan supply chain partners are beginning to feel the pinch in November.

The Digitimes report is based on supply chain sources and so it is difficult to verify its credibility. Multiple reputed publications have claimed an iPhone order reduction from Apple but this is the first time that we are hearing about a second wave of order reduction. The reduction in orders has led to Foxconn and many of other Apple suppliers to reduce their workforce and take other cost-cutting measures.

Our Take

DigiTimes has a very flaky record so it is better to take this report with a pinch of salt. While there might be some truth to Apple reducing iPhone orders, I think analysts are misreading Apple’s supply chain strategy. The company must have stocked up on enough stock of its new iPhones for the key holiday season and it is now reducing orders for the devices as iPhone sales will only go down from here.

Despite claims of iPhone sales slowing, it was the most popular smartphone in China on Single’s Day (11.11) and it continues to remain among the highest — if not the highest — selling smartphone during the holiday season in the United States.

[Via DigiTimes]