(Yicai Global) Nov. 5 -- Apple has slashed orders from Foxconn by 10 percent amid sluggish sales of new iPhones, a move that could lead to layoffs at the Taiwan-based supplier.
Distributors claim that sales of the iPhone XS are well below expectations due to its steep price, which has negatively impacted upstream and original equipment manufacturer, or OEMs, the state-backed Securities Times reported today.
"Statements regarding sales increases of new phones released by Apple in some channels are not true," Securities Daily said, citing sources familiar with the matter. "In fact, sales growth of several of its newly launched phones have seen a broad-based slowdown in the past year."
The US tech giant has announced that it will no longer provide sales data on its key hardware products.
Apple has slashed its iPhone XS/MAX orders from Foxconn by 10 percent while another Taiwan-based supplier Pegatron also suffered a 10 percent order loss on the iPhone XR, according to Mobile No. 1 Research Institute, a Chinese website focusing on research of the mobile phone industrial chain. Foxconn, the world's largest contract electronics manufacturer, which relies heavily on Apple, may be the first to be impacted.
IPhone parts suppliers also face a bleak period. Some have even suspended production temporarily in the first quarter since orders for parts of the iPhone X, iPhone 8 and iPhone 8 Plus were 15 to 30 percent lower than expected. Some upstream supply chain manufacturers who produce memory chips, camera modules, and 3D sensor modules for iPhones have also been asked to control their inventory to tackle the impact of declining orders.
The average selling price of iPhones rose to USD793 from USD724 in the third quarter, but the high-price strategy has not paid off. The more expensive new iPhone series fell below its offer price just a few days after it was launched.