Apple falls 2% on iPhone production cut report
PUBLISHED ONJanuary 06, 2016 12:15 AM
Shares of Apple took a leg lower Tuesday on the heels of a report saying the tech giant may significantly slash its iPhone 6S and 6S Plus output.
Japanese news outlet Nikkei reported the tech giant is expected to reduce the output on its flagship device by about 30 per cent between January and March.
Apple declined CNBC's request for comment.
The company's stock fell more than 2 per cent after the report was released, and hit a low of US$102.41 (S$146.68). It closed at US$102.71 per share.
The move would weigh heavily on Apple's parts suppliers in Japan and South Korea, the report said. Originally, the company told its suppliers it would maintain iPhone 6S and 6S Plus production levels on par with those of its previous models, the iPhone 6 and the iPhone 6 Plus, Nikkei said.
However, inventories of its newest model have piled up in Asia, Europe and the US amid lackluster sales.
"It's really more evidence that things are getting worse," Brian Blair, principal and co-founder of Grays Peak Capital, said Tuesday on CNBC's "Closing Bell."
Blair noted that analysts have so far seemed to ignore supply chain "weakness." However, estimates for iPhone sales in the current quarter may start to come down, he contended.
