Apple Lowers Supply Chain Orders Due to Slow iPhone 6S Demand

Dec 03, 2015 04:17 AM EST

(Photo : Getty Images) Apple has cut down supply chain orders as sales of the iPhone 6 and iPhone 6S has been weak. Experts are positive that the release of the iPhone 6C next year could boost the company's sales figures.

Apple (Nasdaq: AAPL) cut its iPhone supply chain orders for November because the iPhone 6S is supposedly not doing well, according to Credit Suisse. There have been negative reports surrounding the company and while some assume this clamor is overestimating risks in a bid to gain attetion, there is real risk for Apple is if it cannot grow iPhone sales in the coming months.

Like Us on Facebook

Analysts are concerned because the iPhone 6S had a grand opening this year, including in China's massive market. China was not part of last year's iPhone 6 debut because of regulatory issues and a delayed release. The iPhone 6 was launched in 10 countries including Australia, the United States, Canada, Germany, France, Japan, Hong Kong, Singapore, United Kingdom and Puerto Rico. However, the iPhone 6S was launched in 12 countries, including New Zealand and China as well as the aforementioned markets.

Credit Suisse notes that the iPhone supply chain orders weakened lately and its continued weakness could affect Apple shares for the coming weeks or quarters. In light of the sagging sales, Credit Suisse has lowered its CY16 EPS estimates by 6% but still believes that Apple will remain an Outperform with "high retention rates, continued installed base growth, and the optionality of a smaller 4-inch iPhone.

Such low estimates might weigh down the company's stock price in the coming months, but the unit sales of Apple's iPhone might get a boost in the long term if customers keep choosing device installment plans with two-year contracts. Credit Suisse estimates that Apple's iPhone global installed customer base will increase from 400 million users last year to around 615 million in 2017.

It is also expected that the debut of a 4-inch iPhone 6C in March 2016 would help boost Apple's earnings-per-share by 62 cents in 2017. Supply chain reports say the iPhone 6C will have a metal case outer design and specs that are similar to an upgraded iPhone 5S.

TagsiPhone 6S low Demand, Apple November Supply Chain Order, Credit Suisse Apple, iPhone 6C