Apple iPhone 6s, 6s Plus Production Cuts: Investors Panic, Channel Shrugs

A Tuesday report by Japan's Nikkei Asian Review that Apple is expected to significantly cut output of its new iPhone 6s and iPhone 6s Plus smartphones sent investors scrambling to sell Apple shares, but an Apple partner said there's no reason at all to panic.

Nikkei reported that Apple has told its Japanese and South Korean parts suppliers that it will cut first calendar quarter 2016 output of the iPhone 6s and iPhone 6s Plus smartphones by 30 percent compared with earlier expectations set when the devices were launched in September.

Nikkei said the decreased sales expectations come as a result of lackluster sales in markets around the world, a lack of a perceived advantage for the new technology compared to older models, and the price impact from the appreciation of the U.S. dollar.

[Related: Gartner: Microsoft Windows-Powered Smartphones Struggle In Q3]

Apple did not respond to a request for further information by publication time.

Investors punished Apple over the report. The company's share prices fell 2.5 percent, to 102.71, by the close of the trading day, and in after-hours trading continued falling, to less than $102.40.

One Apple partner, however, said reports of a possible cut in output will likely have little if any impact on the channel's business with the vendor.

Stephen Monteros, vice president of business development and strategic initiatives at Sigmanet, an Ontario, Calif.-based solution provider and systems integrator that works closely with clients looking to move their applications from PCs and tablets to smartphones, said Apple's telling suppliers about a 30 percent cut in production expectations does not mean that output will actually fall.

"Remember, these were Apple's projections," Monteros told CRN. "Apple projections always call for incredible growth. Their sales are strong, so the company always sets the bar high."

Customers who purchase Apple products are investing in the Apple platform, Monteros said. "With Apple, it's almost a religion," he said. "When someone goes to Apple, they're not going back to something else."

Monteros said there are still lines at the Apple Stores, and customers are increasing their use of Apple technology. "It may be there's not the kind of growth [Apple] saw in the past," he said. "Or maybe people are just holding on to older phones longer. But they still need apps."

PUBLISHED JAN. 5, 2016