While Apple might be insulated from the effects of the weakening demand for its iPhone XS and iPhone XR because of its business model, most suppliers have apparently started feeling the heat already. As analysts had pointed out, the Cupertino giant is cutting back on production in response to lower than expected demand. According to a new supply chain report, the company has reduced orders for both the new models for a second time and this has not gone down well with suppliers.
As iPhone Orders Are Cut, Suppliers Are Reportedly Feeling the Pinch
The camera lens supplier for iPhone, Largan Precision, expects its November revenue to be lower than the October one. Similarly, Career Technology, which supplies flexible PCBs for iPhones, has laid down 110 employees to compensate for the order cut. Another unnamed iPhone assembler has decided to reduce expenses to make up for the substantial reduction in orders. These are reports coming from DigiTimes.
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However, not all suppliers have been equally affected. For instance, TSMC has nothing to worry about as there are many other high-profile clients in the queue for its 7nm FinFET process, such as Huawei, NVIDIA, Broadcom, and Xilinx. Similarly, Dialog Semiconductor, the power management tech supplier, hasn’t been hit as hard, as its technology is used in many Apple devices and not just iPhones.
DigiTimes is not always so accurate when it comes to predictions about Apple. It even claimed that iPhone X tanked at the market, and was not selling as well as the iPhone 8. It is possible that suppliers are making adjustments based on the first order cut, and that has been perceived as the second round of order cuts.
However, Apple doesn’t seem to be doing so well when it comes to sales and it will not provide unit sales in its next quarterly financial results. This has led analysts to believe that iPhone sales have reached their peak and it’s going to be a downward trajectory from here on.
If you want to read about other reports that might provide evidence that Apple’s 2018 iPhone lineup isn’t selling so well, you can check out the links below.
- iPhone XR Shipments Lifecycle Cut by 30 Million by Renowned Analyst – Lowered Demand Intense Competition Are Few Reasons Highlighted
- Apple Manages to Find Some Success With iPhone XR Sales, but That Is Not Enough to Prevent a Production Cut
- iPhone XS Lineup More Successful That Its Predecessor – iPhone 7 Continues to Be Most Popular [Flurry Analytics]
Source: DigiTimes
