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Apple will halve iPhone X production after limp holiday sales, report says

According to a report from Nikkei, Apple will be halving its initial production estimates for the iPhone X in the three-month period that began in January.

The initial estimates, set during the November launch window of the iPhone X, were for 40 million units. According to Nikkei’s unsourced report, the company informed suppliers that the number has been revised to 20 million units after international sales during the holiday season were less than anticipated. Not long after the news broke on Nikkei, the stock market responded to the news and Apple’s share prices fell 1.9 percent — a loss of $45 billion.

This isn’t the first we’ve heard of issues surrounding the iPhone X. Last week, an analyst from KGI Securities predicted that the iPhone X would be permanently retired in the summer of 2018, following sales that were less than expected.

Interestingly, production numbers for the iPhone 8, 8 Plus, and iPhone 7 have not been altered, with Apple still expecting to maintain a production target of 30 million units for the cheaper, less advanced models. This tallies with another previous report from analysts Cowen & Co. that customers preferred cheaper iPhones to the more expensive iPhone X and blamed the extremely high $999 iPhone X price tag as the reason that many Apple consumers were gravitating to the other models.

The reason for the high price tag is likely for a handful of reasons. Apple’s iPhone has always been a premium brand but the iPhone X broke new ground even in that marketplace. Most commentators point to the price of OLED displays as being a large part of the reason that the iPhone X’s price was so inflated above the market average. The OLED screen on the iPhone X was Apple’s first, and with mobile competitor Samsung being the only supplier who could supply enough displays for Apple’s needs, the iPhone giant would have likely been paying top dollar for each display.

Regardless of this news, Apple’s iPhones continued to sell well toward the tail end of 2017. While $45 billion may also be a large sum of money, it’s not a massive relative drop for Apple, which is on track to becoming the world’s first company valued at $1 trillion.

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