iPhone component makers are in turmoil, claims a WSJ report, as a result of Apple having to slash production orders for the iPhone XS, iPhone XS Max, and the iPhone XR as a result of weaker than expected demand. According to the report, the iPhone XR is hard hit, with Apple slashing a planned production run of 70 million units by up to a third.
Wind that things were not good came last week as major iPhone component manufacturers such as Qorvo Inc., Lumentum Holdings Inc. and Japan Display Inc., cut quarterly profit estimates as a result of a reduction in previously-placed orders from a large, unnamed customer.
Foxconn, which is the largest assembler of the iPhone, has also cut overtime hours.
So, what could be behind Apple’s difficulty in dialing in demand? One suggestion made in the WSJ piece is choice:
“The more choice you introduce, the harder it is to pinpoint who will buy what,” said Steven Haines, chief executive of Sequent Learning Networks, which has advised companies such as FedEx Corp. and Verizon Communications Inc. on product management.
Another possible reason is that sticker shock of the higher-end devices is putting buyers off making the decision.
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