Apple Slows Down Shipment of iPhone X Parts On Concerns Over Slow Demand
Initially, after the weak sales of the iPhone 8, analysts were quick to reassure Apple’s fans and its consumers that the reason the iPhone 8 sold poorly was that the newer and fancier iPhone X was going to sell better than its already-obsolete counterpart. There was a presumption that the iPhone8’s sales were essentially being cannibalized by the iPhone X.
The problem is, Apple itself doesn’t seem to believe this explanation:
Following an embarrassingly dull rollout of the iPhone 8 last week, Apple’s woes may be spreading to its flagship gizmo for the current product cycle, the iPhone X.
As Digitimes reports, Tim Cook’s company has instructed component suppliers to “withhold part of the component shipments prepared for the production of iPhone X devices” according to unidentified Taiwan-based upstream suppliers.
The reason for the delay is that Apple is waiting to see the pre-sale orders of the iPhone X as well as the sales performance of the iPhone 8 and iPhone 8 Plus before pushing the production of iPhone X into full gear, said the sources.
The sources explain that iPhone X component suppliers are currently shipping parts and products that amount to only about 40% of the quantities originally planned for the initial production of iPhone X. However, despite the instruction for shipment slowdown, some suppliers still need to step up production to meet the 40% requirement due to low yield rates at their production lines, the sources indicated. Apple is said to have adopted the same strategy previously for iPhone 7 in 2016 – a phone which met with lackluster demand – during which initial shipments of parts and components reached only about 60% of the materials originally required by the vendor, with sources adding that Apple pulled in the remaining 40% of orders 1-2 months later.
“Orders of the new IPhone have disappointed the market and foreign investors may continue net selling Taiwan stocks,” said Alan Tseng, Taipei-based vice president at Capital Investment Management. “The retreat of Apple suppliers has pulled down the benchmark index and could drag the index even lower in the coming month.