Brian Blair, an analyst at Wedge Partners, has said that Apple has cut production of its iconic smartphone by 20% in the 2nd half of the 2013, as it responds to an ongoing slowdown in growth.
Blair said the cut in orders were for all iPhone models and was likely to be a reaction to flagging demand “globally”. Apple is now set to produce 90-100m handsets in the 2nd half of the year, down from earlier estimates of 115-120m units.
Selling that many phones would still put Apple on course for a 26% increase in sales in the 2nd half of the year, but a long way short of analysts’ one-time expectations for the company, which until recently ranked as the biggest listed business in the world.
Investors took fright at what appeared to be fresh evidence that Apple could be losing its lustre. Shares fell more than 1% in morning trading in New York although they had recovered some of their ground by the afternoon, to close at $415.05.
The iPhone and iPad producer briefly passed $700 a share in September, after record sales of its devices, but it has lost momentum in recent months amid fears that it does not have enough innovative products in the works to keep stimulating consumer demand.
Traditionally, the company has dealt with the decline in sales of one of type of gadget by launching a new device that can shake up a different category.
Apple’s iPods, which in 2008 generated nearly a quarter of Apple’s income, now register just over 6%. Although Apple only launched the iPhone in 2007, the smartphone now accounts for over half of the company’s revenues, according to Bloomberg data. Investors fear that there is nothing to replace the iPhone and the iPad if they trace the same sort of trajectory as their predecessors.