Japan's Nikkei Asian review reports Apple Inc. falling behind by 2.5 percent as compared last Tuesday. In 2015, this US company's revenue dropped by 4.6 percent.
Apple Inc., as reported by Bloomberg early this week, is said to reduce output of its latest iPhones by about 30 percent in the first quarter of 2016. Furthermore, the article by Bloomberg states that the company has initially told parts suppliers "to keep production of the iPhone 6s and 6s Plus models for the January-March period at the same level as for their predecessors iPhone 6 and 6 Plus a year earlier."
The Japan report also revealed that inventories of the new models have "piled up" at stores in developed markets due to amid monotonous sales. Another factor that contributed to the decrease in sales is the increase in the dollar against emerging market currencies. This has caused the iPhones to become more expensive than ever in several countries.
However, this does not mean (as of present) that the company is in trouble. It is believed that the production would return to normal by the second quarter for this year. This will be after the inventory adjustment period is complete.
With regard to the production cut, Daniel Ives of FBR Capital Markets said believes that the situation is "an eye-opening production cut which speaks to the softer demand that Apple has seen with the 6s out of the gates."
He added: "The Street was bracing for a cut, but the magnitude here is a bit more worrisome and speaks to a soft March quarter on the horizon for Cook & Co. That said, it's near-term pain for long-term gain as the eye on the prize is around iPhone 7 later this year."
Last year, many analysts have predicted that Apple sales of their best-selling product would collapse in 2016. This is based on supply chain issues and on weaker demand.
As of present, the growth of the company has been dependent on their iPhones.
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