We've observed that Apple is more than 4% down as of Monday, the next question becomes whether there's any correlation between the announcement we heard from Apple last month, and the drop in the demand for iPhones in China that's being illustrated by analysts?
Apple recently made it clear that it was no longer going to disclose it's iPhone sales this move has been regarded by analysts as indicative of the likelihood of Apple's sales dropping. Keep in mind the fact that Apple's rise to a $US1 trillion company was greatly driven by the huge demand in China.
Business Insider reported that the middle class in China regard the iPhone as a status symbol, something that boosts the demand for this product. We're now getting increased suggestions from analysts who claim that this demand in China is plunging.
They've actually backed their claims with some data there's a new report that was unveiled by Longbow Research, which reveals that Apple's part suppliers have been instructed to cut down the supplies for the iPhone XR and the iPhone XS Max - 20% to 30%.
However, this is counterbalanced by the increased supply for older models. This report from Longbow validates another report that we got from Nikkei sometime last week. Nikkei revealed that Foxconn had cut the number of production lines of the iPhone XR to 45 from 60.
An analyst from Goldman Sachs also revealed the same thing after they wrote that the demand in China for iPhones is rapidly plunging. As we report this, we have in mind the fact that despite reports about Apple slashing its orders shortly after a launch, there often many reasons why this happens.
In another exercise conducted by Citi, it turned out that consumers are losing interest in each generation of iPhone that's being unveiled. Citi used data from Google's search results. It also alluded to the decline in innovation. Sometime last month we got an announcement from Apple saying that it will stop disclosing its sales units for the Macs, iPhones, and iPads. This led analysts to call press Cook as to whether the move was an anticipation of the decline in sales.
