Apple reduces iPhone production 10% amid focus on services

234
// Apple has ordered its suppliers to cut iPhone production by 10%
// This is the second time in 2 months production levels have been cut
// Tim Cook says he wants to double Apple’s services revenues by 2020

For all the latest retail technology news, make sure to visit Retail Gazette’s new publication chaRGed.com launching in the coming weeks.

Apple has told its suppliers to cut iPhone production by around 10 per cent over the next quarter, as chief executive Tim Cook confirms plans to move towards its services arm.

According to the Nikkei Asian Review, Apple ordered its suppliers to reduce production levels of its new iPhone range including the XS, XS Max and XR models, marking the second time in as many months it slashed its planned manufacturing numbers.

Planned volumes for new and old iPhones are now expected to come between 40 million and 43 million units for the coming quarter, down from previous estimates of between 47 million and 48 million units.

In a separate interview with CNBC, Cook revealed plans to double Apple’s services arm, which includes the App Store, iTunes, Apple Pay, Apple Music and iCloud, by the end of 2020.

“In this last quarter, if you take everything outside of iPhone, it grew at 19 per cent, 19 per cent on a huge business,” he said.

“You will see us announce new services this year. There will more things coming…What was Apple’s greatest contribution to mankind?’ It will be about health.”

This follows a shock profit warning from Apple last week, warning that due to lacklustre iPhone sales its revenues for the final quarter of 2018 are set to come around 10 per cent lower than previous estimates.

In response to questions about falling iPhone sales, Cook added that revenues for Apple’s wearables range are already 50 per cent more than those of the iPod at its peak.

The Apple Watch and Airpods are understood to have each generated between four and six times as many sales as the iPod in the same amount of time.

Click here to sign up to Retail Gazette‘s free daily email newsletter