Apple Reduces iPhone Production Due to Poor Sales – Sales May Keep on Dropping Year After Year
Apple is reducing iPhone production by ten percent in the first quarter of 2017 and reports say that this is due to its slower than expected sales. The tech company has suffered from the same predicament last year and it followed the same strategy. It cut down production during the first quarter of the year. Looking at these comparable events, this could predict a yearly measure for Apple to cope with an over-estimated sales in Q4.
Forbes reported Apple's forthcoming strategy and cited that the popularity of the iPhone could be one of the reasons why this is happening. It was sensible to keep the supply chain lean so that unimpressive sales would not lead to unsold units. Reports said that the sales of the new iPhone handsets continue to be strong but this was not as strong as the previous models.
CNN was one of the first to report on the disappointing performance of the iPhone last year saying that the iPhone 6S then has failed to live to expectations. This failure has apparently channeled till early 2017.
Apple has sold 51.2 million iPhones in the last quarter of 2015 and this was 10 million units fewer than the figures during the initial quarter of 2015. Apple CEO Tim Cook blames this slump to iPhone 6S's unappealing upgrades and end of the iPhone's contract in the United States. American iPhone customers were forced to keep their units longer which allowed them to pay less on their bill.
Somehow, as smartphones and mobile phones develop a standard feature set, hardware upgrades become less and less pronounced. As a result, it could take longer for a mobile phone user to move to a newer model handset. This could spell for fewer and fewer demand for costly phones like the iPhone as years go by.