After the much-anticipated release of the iPhone 8, the phone was touted as being even better than its more expensive counterpart the iPhone X. Sales of the latest Apple product have failed to reflect that hype, and now Apple has cut the production of its flagship product by 50 percent. It is unclear whether this is a temporary move and will only last for the months of November and December.
The move by Apple caused a slight dip in the price of its stock, and it dropped 1.5 percent in premarket trading. By the end of the day, it had dropped by 2.37 percent. This is the first time in the history of Apple that the company has cut its production of iPhone so early in the sales cycle.
Problems with supply chain source
9 to 5 Mac reported that production for both the iPhone 8 and 8 Plus was cut by 50 percent for both November and December. The information came from Reuters after the report was spotted in Taiwan's Economic Daily News. Currently, orders for the iPhone X aren't open, so it is unclear whether or not this news is good or bad for Apple.
It is also unclear whether or not customers are waiting until next year to buy because they don't see a difference between iPhone 7 and 8. Another reason may be that more customers are willing to pay a premium price for the iPhone X. A carrier store survey said that the iPhone 7 is actually outselling version 8.
Investopedia reported that Apple cut its orders for components by 50 percent for the last three months of 2017. The reduction in components could mean that device shipments could be as low as 5 million units. This latest report didn't just affect the price of Apple stock. It has affected the price of their supplier stock as well with Pegatron Corporation stock falling 2.6 percent. Catcher Technology Company stock fell 3.6 percent.
Since the announcement of the latest smartphone from Apple, rumors have continued to surface that there are production problems.
Production cut before iPhone X launch
Mac Rumors reported that this is the first time that Apple has ever cut production on its latest release. The iPhone 8 and 8 Plus were released on September 22. Apple hasn't reported the numbers for its sales of the smartphone yet, and won't release a report until November 2. Preorders for the iPhone X begin on October 27, and Apple is waiting to see if this will influence sales because buyers are holding out for the latest version. Adding to Apple's problems is the release of iOS 11. Users have complained that the new updates are causing problems.