Apple is expected to drastically reduce the production of both its iPhone 6s and 6s Plus following lower sales figures than were previously expected. Originally Apple had told parts suppliers to keep production levels equal to those of the iPhone 6 and 6 Plus.
The cut will be equal to a 30% drop in production for the models that are affected. Reduced production will continue through the January-March period, as retailers will be expected to use their current inventories to reduce the stockpile of iPhone"s, before inventories are expected to return to normal during the April-June period.
Suppliers for Apple"s iPhone devices will be affected by this move. Manufacturers such as Japan Display, Sharp and LG Display will see a drop in shipments of their liquid crystal display panels, along with Sony, who provides the image sensors. Other companies affected include: TDK, Alps Electric and Kyocera, all of whom provide electronic parts.
According to a senior analyst at Mizuho Securities, retailers should be preparing for a year-on-year decline for iPhone sales. The fall in sales is blamed on the lack of performance increases between the iPhone 6 vs 6s, whilst the price-gap between them has been increasing following a stronger dollar.
Apple has been having a less-than calm period recently. The company was fined €318 million for tax fraud in Italy, as well as losing $160 billion off of its stock, where again analysts forecasted a decline in sales.
Source: Nikkei