Sergii Kharchenko | NurPhoto | Getty Images
Official iPhone X release in Kyiv, Ukraine on December 12, 2017.
Apple shares are dropping in premarket trading after a report the company ordered a drastic cut in iPhone X production.
Nikkei reported on Monday the company told its suppliers to cut iPhone X production to 20 million units for the first-quarter from the more than 40 million units target Apple gave in November. The news agency cited weaker than expected sales results at the end of the holiday season as the reason for the move.
Apple shares are down 0.8 percent in Monday’s premarket session after the report. The shares dropped 3.9 percent last week, wiping out $36 billion in shareholder value.
The Nikkei article follows several recent reports from Wall Street and other media outlets pointing to weak iPhone X demand.
J.P. Morgan analyst Narci Chang wrote in a research note to clients on Tuesday, predicting iPhone X production will drop 50 percent in the March quarter versus the December quarter. She reduced her forecast for iPhone X production to 20 million units for the first-quarter from 30 million units.
“We recently picked up more signs of weakening iPhone X orders,” she wrote.
Taiwan Economic Daily also reported in late December Apple reduced its sales forecast for the iPhone X.
As a result some Wall Street analysts are getting worried enough over iPhone demand to downgrade Apple shares this month.
Longbow Research lowered its rating for Apple shares to neutral from buy on Jan. 17, predicting the company will ship fewer iPhones than expected in fiscal 2018.
Atlantic Equities then reduced its rating for Apple shares to neutral from overweight on Jan. 22. The firm predicted weaker-than-expected sales for the company’s March quarter.
Investors are taking notice of the deteriorating sentiment over the company’s fundamentals.
The company did not immediately respond to a request for comment.