Apple cutting iPhone production by 10% in first quarter of 2017
January 1, 2017 – According to some reports, Apple is planning to cut the production [by 10%] of iPhone 6 and iPhone 7 in the first quarter of 2017. Apple is one of the top technology companies in the world; it is the first company in the United States of America that was valued more than 700 billion USD. Apple’s annual income is usually above $200 billion. With more than 100,000 fulltime employees working in different countries, Apple has grown into a mega tech corporation whose name is known in every country in this world. There is no doubt that Apple is selling millions of iPhones every month, but even they have to reduce supply at some stage. Back in the first quarter of 2016, Apple found itself in worrisome situation when their inventory was overflowing with iPhone 6 and iPhone 6S.
Before every launch of a new iPhone model, the demand for the new phone is very high. People pay money in advance to pre-order it and on launch day, you probably have seen [or perhaps been in one of the] lines of customers waiting in front of Apple stores. During this time, demand for the new iPhone is very high and during this time, the supply is usually weaker. This often leaves thousands of buyers waiting for new shipments to arrive. To meet the high demand, Apple has been producing the newer iPhones in bulk. Manufacturers don’t always calculate product demand estimates correctly. Like in the first quarter of 2016, Apple’s iPhone making machines were on fire; they were producing and storing iPhones in a huge number. Off course, they were expecting huge demand from retailers, but they didn’t do their homework right. They produced way too many iPhones, when in reality the demand for iPhone 6 and 6S was going down.
Apple has learned a good lesson from this past experience and that is why they are planning to cut their top models iPhone production level by 10% in the first quarter of 2017; this is to ensure that Apple does not face the same accumulated inventory problem that it faced in the first quarter of 2016. The demand for iPhone 7 is cooling; many customers are now looking at the new iPhone 8 release. There hasn’t been any official word about its release date or specifications, but rumors has it, Apple is going to release it in 2017. Apple is forecasting a reduction in demand for iPhone 7 and that is why they have decided to slow down its production.