Report: Apple to cut production of iPhone 6s and 6s Plus

The company going to slow down production to allow retailers to sell their existing supply

By most accounts the smartphone market is becoming over saturated, with fewer new customers and many existing customers choosing to hold onto their phones for longer.

That slow down is really starting to affect Apple, it seems, as the company is getting ready to cut production of its newest models by nearly a third in the coming quarter, according to a report out from Nikkei on Tuesday.

Apple is reducing the number of iPhone 6s and 6s Plus models by 30 percent, and has reportedly told parts makers to keep production at the same level as their older models, the iPhone 6 and 6 Plus, which came out a year earlier.

This is particularly bad news given that the latest phones are less than six months old, having only been made available for sale in September. Yet inventory has "piled up at retailers in markets ranging from China and Japan to Europe and the U.S. amid lackluster sales," according to Nikkei. That will allow retailers to sell out their current stock before getting new shipments.

Interestingly, the report also states that Apple is planning on resuming normal production in the second quarter of the year. Perhaps that indicates, then, that the problem is not lackluster sales but just too many phones at once.

After all, Apple did increase its order supply prior to the launch of the new phones, making between 85 and 90 million, as compared to the initial production run of 70 million to 80 million for the iPhone 6 and iPhone 6 Plus.

Also, iPhone sales were up in the fourth quarter of 2015, selling 48 million over 47.5 million sold in Q3. It's unknown how sales held up throughout the most recent quarter, and we won't know until Apple releases its Q1 earnings report later this month. 

Still, it's hard not to correlate some of this to what's been happening to the smartphone market overall in the past year.

In 2015, China saw its first year to year decline in the smartphone market in six years. Going forward, the number are only going to get worse from here, at least over the new few years: by the time we hit 2019, growth is projected to have slowed to 4.7 percent.

In all, shipments of worldwide smartphone were expected to grow by only 9.8 percent last year, to a total of 1.43 billion units, the first time on record that they fell below double digits. Still, iOS saw growth in 2015, 17.3 percent, to 226 million units shipped and a 15.8 market share. That is expected to fall to 14.1 percent share by 2019.

Shares of Apple fell by 2.5% on Tuedsay, losing $2.64 to fall to $102.71 a share. 

VatorNews reached out to Apple for confirmation of this report and we will update this story if we learn more. 

(Image source: forbes.com)