Apple to Cut iPhone 6s and 6s Plus Production by 30% in Q1 2016

[Daisy81]

I expect the stock to have slid into the $80s by the time Apple reports earnings. On last quarters earnings call many of the questions were focused on the March and June quarters, which of course Tim Cook refused to comment on. Unless Apple knocks it out of the park and provides better than expected guidance I suspect the call will be brutal. And I wouldn't be surprised if we start hearing chatter about does Tim Cook need to be replaced. I remember in 2013 a Fox Business reporter claimed the Apple board was looking into replacing Cook and demanding he innovate faster. I'm sure the report was BS but it was out there.


And this is what we don't know and why Tim Cook says reading anything into supply chain noise is folly. There was also a DigiTimes story from this fall claiming Apple was taking 30% of its camera business to a different supplier because they got a better deal.

Seeing as his leadership has lead to nothing but smaller, thiner and lighter for things that are not even mobile devices I think maybe he should be replaced. There have been too many things lately that Apple is doing that I dislike.

He seems like good accountant but he is a horrible CEO.

 

[Adithya007]

Or maybe the 6s is just too thick.

Roger that!

 

[TallManNY]

Biggest thing to note is: Apple makes over 60% of their profits on iPhone. Samsung could easily survive the complete collapse of the Galaxy line. I'm not sure Apple could without substantial changes. That's the scary thing I think.

Are you saying Apple couldn't survive or are you saying Apple couldn't continue to be the most valuable company in the world? Those are very different things.

Apple can survive iPhone sales dropping by 50%. Simple. Apple tells vendors to stop making iPhones and then current inventory gets sold off over time. None of the phones for second half 2016, much less 2017 have been made or even ordered. Apple orders less phones for 2017. Problem solved. And keep in mind that Apple has nearly $200 billion in the bank. And remember that Apple can always just lower their prices for iPhones if they have extra stock. And they will still make a good profit off every unit even if they knock of $100 or $200. They need to lose money to not "survive".

Apples stock price would drop a lot. It would be a big issue. But I really don't think you mean "survive". Apple's world leading profit is dependent on the iPhone. Yes, but all he other companies in the world regularly survive (many for years and even decades) without being the most profitable company in the world. Apple can survive if they just become the second most profitable company or vein of they are the one hundredth most profitable company.

 

[TechZeke]

Sales of iPhones will drop dramatically from now on. The reason is that most carriers did away with contracts and suddenly in consumer's mind iPhones somehow don't cost just "$200" like they did before.

Consumers and masses don't care about installment pricing or anything like that, all they see is sticker price.

All they know is this: iPhones somehow cost $749 versus just $199 they used to cost previously, and instantly the decision is made to buy an Android phone. Very very few consumers will buy a freaking phone for $749, installment or not.

Most consumers don't notice a difference between iOS and Android, therefore they will choose the cheaper option.
In fact the reason iPhone took off was because of contracts, no really Apple invented heavily subsidized pricing model with their mandatory $30 data plan option back on 2008.

When people are tricked into thinking that both iPhone and Android costs the same $199 they will choose the iPhone, but when the sticker price reads $749 they will most definitely choose Android.

Apple is up for a rude awakening in 2016. Apple's trickery with $199 dollar iPhone is finally exposed in consumers' minds.

Hit the nail on the head. You'd be surprised by the amount of people who don't think they pay for the phone through the contract. When I tell people that I switched to NEXT, they say "why switch to NEXT? You are paying full retail price!"

It also means people will be keeping their phones longer, and choose to go with hand-me down iPhones. Me and three of my friends all have a "family" upgrade program, where me and friends get the latest phones while cousins, aunts, uncles, and other relatives get our hand-me-downs.

 

[Soccertess]

How about faster tethered charging like other flag ships phones?
How about shipping the phones with an iPad-like charger?
The current wall wart is a damn travesty.

True, but there are some amazing companies out there. I have said it lots on this site, something like Cota Ossia would be game changing (charging up to 30 feet away, albeit it quite low). I say something as there are no commercial products out with their tech yet, but I hope 2016 will be different!

 

[wiz329]

I'm loving the 6s plus. The camera is outstanding, the RAM change is very noticeable when using safari. Force touch is great ,does take some getting used to to press the screen harder than you are used to. 2nd gen touch ID is awesome.

What do you use force touch for the most/where has it improved your daily usage the most?

Genuinely curious here -- I really haven't used it much since the first week I got my phone, though it may be because I've simply been too lazy to learn where it's most useful.

 

[hayden1250]

The iPhone 6S is just too expensive. The 64GB iPhone 6S Plus is the same price as the 11inch MacBook Air....

 

[Michael Scrip]

The iPhone 6S is just too expensive. The 64GB iPhone 6S Plus is the same price as the 11inch MacBook Air....

iPhone prices haven't really changed much over the years.

 

[nando87]

3d touch is quite useless to be honest, although 2gb ram is nice most people don't care about those things. The design is 1+ years old and not the best we've seen, and in addition they haven't added new major carriers, and they have increased prices heavily overseas. All in all it isn't surprising that this iPhone doesn't represent a growth in term of sales from the last generation. That will change with the iPhone 7 I'm sure. AAPL is dead money until then, it could go to 8x USD easily. Massive opportunity there, dividend+growth, it can come back to 130 without problems.

 

[jessica0123]

Maybe all of us have anticipated too much about them.

 

[nando87]

Seeing as his leadership has lead to nothing but smaller, thiner and lighter for things that are not even mobile devices I think maybe he should be replaced. There have been too many things lately that Apple is doing that I dislike.

He seems like good accountant but he is a horrible CEO.

He is a great accountant/manager and jony ive is a great designer, what more could you want? Magic? The apple watch can't be magical, all the things people say here they would like aren't possible yet because actual technology. The smartphone is perfectly non-obsolete and they have quite all the profits that sector generates.

Other than that, the company is an one trick pony, true, but that's because of the iphone's enormous success

 

[Adithya007]

Sadly Apple won't be able to boast in their upcoming iPhone's launch that the previous iPhone had out sold the then-previous iPhone anymore.

 

[617660]

I have a 6 and just got a 6S in last week. I'm returning it. The extra RAM does not affect my usage and the camera is not what I'd call a vast improvement. Live Photos and the front facing camera flash are software upgrades and should have been part of iOS 9 for iPhone 6 users at least, but they're gimmicks to me. I've not yet seen force touch to be worthwhile. Hoping the 7 is a worthwhile upgrade this fall, otherwise I'll keep my 6 for another year. I did the same with the iPhone 4; didn't get another iPhone until the 5S.

Wait? You mean using the screen as the front facing camera flash is only available on the 6s?

What possible technical reason there is for it not be available on older iPhone with iOS 9?

 

[hayden1250]

iPhone prices haven't really changed much over the years.

I purchased my 64GB iPhone 6 Plus for NZD$1,249. Now the 64GB iPhone 6S Plus is $1,599. In saying that though, it is solely to do with the strong US dollar. However, that doesn't mean we end up with more money in our pocket to pay the difference!

 

[Michael Scrip]

I purchased my 64GB iPhone 6 Plus for NZD$1,249. Now the 64GB iPhone 6S Plus is $1,599. In saying that though, it is solely to do with the strong US dollar. However, that doesn't mean we end up with more money in our pocket to pay the difference!

I should have said... APPLE hasn't really changed the price of the iPhone over the years.

But yeah... that sucks. Though the value of the US dollar is out of Apple's control.

 

[xmichaelp]

Agreed. And I won't replace my phone until it is 100% unusable.

That's terrible... If you're paying for a pricy contract every month you may as well get the new phone every time if you can.
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Completely agree, also touch ID was so fast it made reading notifications impossible. Luckily 3D touch can be turned off making it again possible to tap links in Safari, unfortunately it wasn't possible to slow down touch ID. This botched S cycle will definitely make me think twice about upgrading again. I wouldn't be surprised if Apple switch to a major phone every 2 years instead.

Only upgraded was because of 2GB RAM which because of buggy software made things worse, with reboots nightly because it thought it was out of RAM when it wasn't, hoping it will be fixed at some point in the next year. The crazy thing is this was the major new feature of any benefit and wasn't even marketed I suppose because it didn't work properly yet.

How was the S cycle botched? Because touch ID is too fast?

God, I hate this place. All anyone does is whine.

 

[Ed217]

Better is the enemy of good enough.

That was a big factor in the reduction of the PC desktop and the laptop. That is now affecting the sale of smartphones.

Couple that with the new full pricing models and the result may be less overall sales.

 

[iBug2]

Biggest thing to note is: Apple makes over 60% of their profits on iPhone. Samsung could easily survive the complete collapse of the Galaxy line. I'm not sure Apple could without substantial changes. That's the scary thing I think.

I think Mac business alone is generating enough profits to sustain Apple's day to day operations, so I wouldn't worry.

 

[SeniorGato1]

I own a 6 plus, am a tech nerd, and purchased a 6S (from 5S) for the wife primarily for the extended t-mobile bands due to reception complaints at her work. This is the first iphone model that I will pass on upgrading. The features seem gimmicky and not worth the upgrade costs.

Other factors leading me to keep my iPhone:
1) Battery replacements are fairly cheap and easy (I've replaced 4, 4S & 5 batteries for around $25USD)
2) Battery replacements can be performed professionally at many places ($50 USD) - increasing the longevity of devices within my family.
3) Normally I justify a purchase/early upgrade by passing down last years model to a family member. I've run out of family members

Apple's commercials about "everything changed in iPhone" comes off as desperation. The market is saturated the the upgrades are not worth it.

One thing I'll definitely not do, is upgrade to iOS 10 on the 6. One thing I've learned is not to jump software updates more than once as performance will suffer. Suspect it's a last ditch effort by Apple for people to upgrade.

 

[krspkbl]

£540 is the starting price and all that gets you is a pathetic 16GB of storage. If you want a decent amount then you're looking at £619 at least.

It's just not worth it when you can get a phone that works just as good for less than £400. If Apple wants to sell more iPhones then offer 64/128/256GB options at £400/450/500 and the Plus model for an £70-80 premium.

I bought a 6S+ and it really is a great phone but not worth the £700 I paid. Returned it and happy with my 2 year old phone that cost me £250. You really can't use the excuse that iPhones are premium/Luxury. They are NOT. When I buy something premium/luxury I expect the quality to be very high which is not something I can say of the iPhone 6S+. Build/performance quality is not worth the price paid.

Smartphones are a huge part of our lives now. The first iPhone kickstarted it back in 2007. If Apple want to keep competing and selling loads then they need to lower margins and make a little less profit. Same happened to Macs, iPod, TV's, cameras, and every other piece of technology once it got huge.

 

[Marx55]

Apple should cut prices 50% and thus boost sales 20-fold.

 

[AleXXXa]

bought the wife a 6s plus to replace her 6 plus... She can't tell the difference... (but I changed from my 6 to her old 6plus and I love it...)

Average folks can't tell the difference between last years and this years model...

Average folks don't buy a phone every year. They buy it every 2 or more years when their contract is up or when their old phone is dead.

 

[latweek]

does this mean uh...the popularity is waning?
Ian: Oh, no, no, no, no, no, no...no, no, not at all. I, I, I just think that the.. uh.. their appeal is becoming more selective.

 

[splitpea]

I suspect that people on a 2-year upgrade cycle who want a 4" phone are the ones not buying this year.

For the 6 there was a lot of pent-up demand for a larger phone (so a lot of people upgraded early), and those who wanted a smaller one and were on the 2-year cycle would still find the 5s an upgrade from the 5.

This year the 2-year cycle is already on the 5s, so a lot of us are either holding out in hope of something like the rumored 6c, switching to Android, or just sticking with the 5s until it's no longer useful.

Plus, those who upgraded early to get the 6 are back on their 2-year cycle and skipping the 6s in favor of what presumably will be the iPhone 7.

 

[GFR50]

Here in Australia a 64gb 6splus is 1379! For that you can buy the latest android phones with expandable memory, and a tablet.

At JB HiFi a 64Gb Apple iPhone 6S Plus is AUD 1379 and a 64Gb Samsung S6 Edge+ is AUD 1295.
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It has nothing to do with being S cycle.

Sales of iPhones will drop dramatically from now on. The reason is that most carriers did away with contracts and suddenly in consumer's mind iPhones somehow don't cost just "$200" like they did before.

The majority of Apple's sales are into markets that do not have (and never did have) the US-style bundling that made phones appear to cost $200.