14 DAY TRIAL // Apple itself has recently acknowledged that iPhone sales are slower than anticipated, and now the company is trying to deal with this drop by reducing manufacturing costs.
According to a report from Nikkei, the Cupertino-based tech giant has recently called for its Asian suppliers to cut the price of the iPhone parts they manufacture, though it’s not yet clear if this request has been accepted or not.
However, while at first glance a discount would help Apple make the iPhone itself cheaper, a move that is more or less expected given the slower demand, the tech giant is actually looking into ways to deal with the impact that the trade war between the United States and China has on its products.
Suppliers anticipate further drops
Apple CEO Tim Cook said earlier this month that the growing tension between the two countries is one of the reasons for the dropping iPhone sales.
“What I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy. We saw, as the quarter went on, things like traffic in our retail stores, traffic in our channel partner stores going down, the reports of the smartphone industry contracting,” he said.
The report indicates that most suppliers have already manufactured up to eight weeks of inventory of components for the iPhone, up from the typical two weeks that most Apple partners were used to in the previous years.
This is an indication that demand remains low, and Apple cutting orders for the iPhone is impacting suppliers as well. Taiwan has recently revealed that Apple’s poor sales have hit the local economy, as many of the largest manufacturers in the country are getting lower than anticipated orders.
Most suppliers expect further drops in the coming months, especially as the market typically declines after the holiday season.