Apple keeps adjusting production of the 2018 iPhone generation due to weaker than anticipated demand, and the company has just decided to cut orders at suppliers for the second time in a row, according to a new report.
Cupertino first reduced production of the iPhone XS and iPhone XR in late October, and now Digitimes writes that suppliers were informed of a second cut earlier this week.
Several Taiwan supply chain partners are seriously hurt by Apple’s adjusted production, with some announcing layoffs in order to reduce manufacturing costs and align the output with Cupertino’s requirements.
Career Technology, which makes flexible PCBs for iPhones, laid off a total of 110 workers, the source adds, while another unnamed iPhone assembler has decided to accelerate its restructuring plans with layoffs earlier than anticipated following Apple’s production cut.
Largan Precision, the Apple supplier in charge of building iPhone camera lens, expects a major revenue drop in November due to the adjusted production.
Damage control mode
Apple itself has remained tight-lipped on the sales performance of the 2018 iPhone generation, but reports coming from people close to the matter indicate the company has entered damage control and is planning several changes that should help reignite sales of the new devices.
In addition to the production cuts, Apple wants to bring back the iPhone X to the market, possibly at a lower price, in order to convince more users to upgrade their older devices. iPhone X was originally discontinued in September after the 2018 lineup was launched.
Furthermore, Apple is working with carriers to offer price cuts when purchasing iPhones with a contract, and it’s believed the discounts go as high as $100. For the time being, however, there are no plans for price cuts offered to iPhone buyers when purchasing devices unlocked without a contract.