(Yicai Global) March 11 -- Apple is not cutting iPhone orders by 20 percent because of lower demand, as reported by Nikkei Asia, according to an executive with a leading firm in the US tech giant’s industrial chain.

“Demand hasn’t fallen,” the unidentified person told the China Securities Journal. “Sales of iPhone 12 and iPhone 12 Pro have been better than expected.” 

Nikkei Asia reported yesterday, citing sources familiar with the matter, that Apple is paring orders for all of its iPhones by about 20 percent compared with plans made in December, with the iPhone 12 mini accounting for most of the scaling back.

California-based Apple aimed to produce as many as 96 million iPhones in the first half of this year, but is now targeting 75 million, slightly more than shipments in the same period last year, Nikkei Asia said.

Shares of Apple suppliers listed in the Chinese mainland fell today following the report. GoerTek [SHE: 002241] closed 3.3 percent lower at CNY29.50 (USD4.55) and Luxshare Precision Industry [SHE: 002475] ended down 3 percent at CNY42.15, after both sank as much as 7.5 percent earlier in the day. Lens Technology [SHE: 300433] gained 1.5 percent to CNY28.80, reversing a 4 percent drop.

The benchmark Shenzhen Component Index added 2.2 percent.

Hardware media WCCFTECH reported earlier that Apple’s supply chain will stop producing the iPhone 12 mini in the second quarter of this year because of weak demand. It cited J.P. Morgan analyst William Yang.

Morgan Stanley also said in a research note that Apple had cut iPhone 12 mini orders by 2 million and was focusing on sales of other models, including the iPhone 12 Pro. That prompted investors to question whether suppliers have had their orders cut.

A supplier in China confirmed to the China Securities Journal a cut in iPhone 12 mini orders. “Chips are in short supply now, and Apple is expected to prioritize supply of iPhone 12 and premium models, with iPhone 12 mini likely to be affected,” the source told the Journal.

“Some Apple supply chain firms have already adjusted their production lines to only make iPhone 12, iPhone 12 Pro and iPhone 12 Pro Max amid the chip shortage,” the insider added. So lower mini orders, will “basically have no impact on them.”

Editor: Peter Thomas