A report from Japanese newspaper Nikkei suggests that Apple Inc. (NASDAQ:AAPL)’s iPhone 7 isn’t selling well and sales are sluggish. The report (via Apple Insider) claims that the new iPhone lineup has “sold more sluggishly than expected.”
According to the Nikkei report, the Cupertino, California-based firm plans to cut production of both the iPhone 7 and iPhone 7 Plus. The tech giant has reportedly cut iPhone production by 10% for first three months of 2017.
iPhone 7 Selling Well in Japan
However, the report also adds that the 5.5-inch iPhone 7 Plus is a hot seller and the company was unable to meet demand for the jumbo-sized handset due to a shortage of camera sensors.
The report notes that the iPhone 7 has been performing well in Japan where its sales are strong, particularly due to the Apple Pay in the country in October. Japan accounts for around 10% of the company’s global sales.
Analysts had predicted that the iPhone 7 and iPhone 7 Plus would be Apple’s most successful iPhones to date after Samsung recalled Galaxy Note 7, the main rival of the iPhone, due to battery problems. Some sources had predicted that Apple was set to move over 100 million iPhone 7 devices by the end of the year.
Apple in 2017
iFans are expecting Apple to release an iPhone 7S in 2017. But many reports claim that the company might skip the traditional S upgrade and move straight to the iPhone 8, which is rumored to feature an OLED display, all-glass body, top-class camera, and a long-distance wireless changing technology.
“So there’s a good chance that Apple may decide to skip directly to the next full number, naming the 2017 iPhone the iPhone 8,” according to a note from KGI Securities.
In October 2016, UBS analyst Steven Milunovich indicated that demand for the iPhone 7 is ‘tepid’ in China. The analyst told CNBC that “iPhone 7 interest tepid … distributor checks find that iPhone 7 sales are weaker than the 6s was out of the box [after launch].” According to the analyst, who reiterated a buy rating on AAPL, the iPhone maker has been losing market share to domestic Chinese brands including Huawei, OPPO, and Vivo.
As we reported earlier, Apple faced many problems in 2016 which was a painful year for the company in many ways. The company is expected to introduce some great products this year including the iPhone 8, new iPads and Watch 3 edition.
The majority of future growth for the tech giant’s depends on its strong foothold in China, the world’s second-largest economy representing about 25% of the company’s revenue. The company plans to improve its position in China where it saw a 33% year-on-year decline in revenues for the fiscal third quarter of 2016.
Apple Inc. (NASDAQ:AAPL) is going to boost its investments in China. During his recent visit to China, the company’s CEO Tim Cook had met with senior government officials and pledged to expand his company’s presence across the country.