Apple Inc (NASDAQ:AAPL), stock is falling by -1.83% to $103.44 in current trading on Tuesday, after a Japanese news service stated that the company will cut output of the newest iPhone models by about 30% for the first quarter of 2016, due to soft sales.
Suppliers were initially told that production of the iPhone 6s and 6s Plus would continue at the same rate as the previous models, but inventories are on the rise in several key markets, counting China, Europe, Japan and the U.S., Nikkei noted.
Normal production levels are predictable to resume in the second quarter of 2016, Nikkei added.
Shares of Apple are also declining after FitBit (FIT) declared it will launch a smartwatch called Blaze that will compete with the Apple Watch, according to Bloomberg.
According to (Reuters) Report, Apple Inc (NASDAQ:AAPL), is predictable to cut production of its latest iPhone models by about 30 percent in the January-March quarter, the Nikkei stated.
As inventories of the iPhone 6s and 6s Plus have piled up since they were launched last September, production will be scaled back to let dealers go through their current stock, the business daily stated.
Apple’s shares were down 2.2 percent at $102.97 in afternoon trading. The stock has lost about a quarter of its value from record highs in April, reflecting worries over slowing shipments.
“This is an eye-opening production cut which speaks to the softer demand that Apple has seen with 6s out of the gates,” FBR Capital Markets analyst Daniel Ives said. “The Street was bracing for a cut but the magnitude here is a bit more worrisome.”
Shares of Apple suppliers Skyoperates Solutions, Qorvo Inc and Cirrus Logic, among others, also fell following the report.
Other companies affected comprise Sony Corp, which makes image sensors used in iPhones, and electronic parts makers TDK Corp, Alps Electric Co Ltd and Kyocera Corp, the paper stated.
LCD panel manufacturers Japan Display Inc, Sharp Corp and LG Display Co Ltd will also be hit by the cut in production, according to the report.
Production is predictable to return to normal in the April-June quarter, the Nikkei stated. Reuters Report.
Apple Inc. (NASDAQ:AAPL) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications.