Even before the new year rolled in many analysts had started predicting that perhaps the iPhone could see its first sales decline in years, and perhaps they might be proven right. A new report from a reputable publication claims that Apple has started slowing down iPhone production because it possibly anticipates low sales this time around as opposed to last year.
The Wall Street Journal claims, citing “three sources familiar with Apple’s supply chain,” that the company has notified its suppliers in China to slow down production. Low orders from Apple mean that those suppliers don’t need as much staff as they previously did to cater to the iPhone’s stellar demand, which has resulted into idle capacity and layoffs.
There does appear to be some truth to these claims considering that Foxconn, Apple’s primarily iPhone manufacturer, has received a $12 million grant from the Chinese government to minimize layoffs at its massive facilities.
It remains to be seen though how much of a decline Apple witnesses in iPhone sales this year, and whether that’s due to its competitors gaining its customers to simply saturated demand in the high-end segment of the market, analysts appear to think it’s the latter.
Apple’s cash cow over the past few years has been the iPhone, that’s no secret, so a decline in sales would reflect prominently on the company’s balance sheet. Although a few bad quarters won’t really spell doom for one of the biggest corporations on the planet but Apple would have to adjust its strategy to ensure that low sales don’t continue to impact its bottom line.
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