A report from Nikkei claims Apple is reducing production of its iPhone handsets by around 10% in the first quarter of 2017, due to slowing sales. The news comes on the heels of a Flurry Analytics report indicating Apple’s mobile devices held onto a lead in activations during the holiday season.
Apple cutting production after a holiday quarter isn’t unusual, as a similar cut in production occurred in the first quarter of 2016, when Apple cut production by around 30%, which was also reportedly due to slowing sales. There is traditionally a lull in sales for devices such as the iPhone, following the all important holiday sales period.
Apple scored well during the 2016 holiday sales period, as Apple device activations accounted for 55% of all holiday device activations, with Samsung in a distant second at 21% of activations.
While Nikkei claims the production reductions are due to “sluggish demand,” the report also notes that “a shortage of camera sensors has curbed Apple’s ability to meet demand for the phones.” Japanese demand for the new iPhone 7 and iPhone 7 Plus remains strong, due to the devices’ compatibility with contactless IC chip readers, used for purchasing transit tickets and other products.