Apple Inc. (AAPL) - Get Report shares edged higher Wednesday despite a report that its key Asia-based supplier, Foxconn, is planning deep cost cuts ahead of a "very difficult and competitive year" for the iPhone assembler.
Bloomberg reported, citing and internal memo, that Foxconn Technology Group (FXCNY) will slash overall costs by 20 billion yuan ($2.9 billion) next year, and cut around 10% of its non-technical staff, as part of the reductions. The cost cuts linked to Foxconn's iPhone business would be around 6 billion yuan, Bloomberg reported.
The Bloomberg report followed a Wall Street Journal piece earlier this week that suggested yet more iPhone production cuts as waning demand and an increase in available models disrupts the tech giant's global supply chain.
Apple Inc (AAPL) - Get Report shares, which have fallen more than 23.7% since hitting a record closing high of $232.07 on October 3, hit the lowest level since May yesterday after slumping a further 4.78%. The stock was marked 1% higher $178.50 each at the opening bell Wednesday.
The Journal reported that Apple has notably reduced orders for the three new iPhones it unveiled in September -- the XS, XS Max and the XR -- from suppliers, and slashed planned production for the iPhone XR by around 33% from the 70 million units it originally had anticipated from launch through the holiday season. AAPL fell 3.96% on the news to close at $185.86. All told, the stock has lost some 20% since peaking on Oct. 3 at $233.47 intraday.
The latest Journal piece follows on from a series of analyst downgrades and reports of waning iPhone demand and production cuts, as well as a troubling profit warning from Lumentum Holdings (LITE) - Get Report , a key supplier of 3D chips for Apple iPhone's facial recognition system.
The reports came in the wake of a decision by Apple to no longer provide detailed numbers for the sale of it individual products, such as iPhones and mac computers, meaning investors will no longer be able to calculate their average selling price, a key metric used to gauge the company's profitability.
The decision to scrap that guidance, as well as forecasts for December quarter sales of around $91 billion over the three months ending in December, overshadowed a stronger-than-expected September quarter which saw better-than-expected earnings of $2.91 per share and group revenues of $62.9 billion, and sent shares tumbling more than 6.3% Friday, the biggest single-day decline since 2014.