In Brief

Apple to cut iPhone XS and XR production by 10%

Company chief Tim Cook blames poor sales on trade war between US and China

Apple is scaling back production of its latest iPhones amid falling sales in China, according to reports.

Insiders at the Cupertino-based tech giant told Japanese news site Nikkei that Apple is cutting manufacturing targets for its latest budget XR and flagship XS models by 10% during the first quarter of 2019, which closes at the end of March. 

The reported move marks the second time in two months that Apple has trimmed its planned production for its smartphones, with overall targets for both new and old models now reduced to between 40 million and 43 million handsets in the first three months of this year, says US-based news network CNBC. The initial target was between 47 million and 48 million. 

The latest cuts come after Apple saw $55bn (44bn) slashed from its stock market value last week, following a warning about slowing sales in the Chinese market. 

Apple chief executive Tim Cook told investors that the company “did not foresee the magnitude of the economic deceleration, particularly in Greater China”.

The region, which includes Hong Kong and Taiwan, accounts for almost 20% of the iPhone maker’s revenues, according to the BBC.  

Cook said the ongoing trade war between the US and China was fuelling weakness in the Chinese economy, leaving consumers with less cash to spend on gadgets. 

However, critics argue that the rise of Chinese device makers may be a key reason for the decline in iPhone sales, says Digital Trends

Apple is now the third-largest smartphone maker in the world, behind Chinese tech giant Huawei and Korea’s Samsung.

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