Apple Cuts iPhone Production Another 10 Percent

People look at iPhones at the World Trade Center Apple Store during a Black Friday sales event in Manhattan New York City US

In the face of flagging sales, Apple has reportedly cut back production of its iPhones by 10% for the first three months of 2019 to refocus its efforts on healthcare, according to a report by Nikkei.

Apple asked its suppliers late last month to produce fewer-than-planned models of the XS, XS Max and XR, Nikkei said, citing sources with knowledge of the request.

Foxconn, which assembles the vast majority of Apple devices, including the iPhone, is one of the first to report falling revenues following Tim Cook's open letter to investors warning of weak iPhone sales.

"Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline".

A different source told the publication the revised plan reduces iPhone production volume to about 40 million to 43 million units from 47 million to 48 million units for the first quarter. The request was made before Apple cut its forecast last week.

As if this didn't make the new year troubling enough for Apple, the company also had to remove the iPhone 7 and the iPhone 8 out of German stores after Qualcomm posted $1.5B (€1.34B) in security bonds to enforce a court decision which imposed a preliminary injunction on the two phone models.

The higher price for the new iPhones has been a concern for analysts and consumers. And that, of course, is why Apple will no longer provide unit sales numbers.

Mueller said today that Apple's current problems are a good example of what happens when a company fails to get the combination of innovation, features and price right. The newest iPhone lineup isn't selling as well, and that's having a huge impact. On a related note, research firm Counterpoint says that although iPhone XR could be the company's best-selling handset till date, it has not yet matched up to the sales performance of the iPhone X that came out in 2017.

Speaking to CNBC Tuesday, Cook said the company was planning to announce "new services" later this year, without elaborating on what those might be.

Investors knocked about $75 billion from Apple's market value last Thursday.