Apple cuts component orders for top-end phones as costs and higher prices weigh on demand

Production Cuts

Apple has instructed several suppliers to reduce part orders for its latest high-end smartphones by at least fifteen percent for October compared to original plans. According to reports from Nikkei Asia, the cutbacks affect the advanced Pro and Pro Max handsets and stem from conservative shipment outlooks that started in early September.

Pricing and Costs

The pullback follows a hundred-dollar price hike across the current top-tier lineup. The base model for the advanced Pro starts at eleven hundred ninety-nine dollars, while the larger Pro Max begins at twelve hundred ninety-nine dollars. Tech companies are buying up massive amounts of memory chips to build artificial intelligence data centers, leading to severe shortages and rising costs that have forced companies like Apple to pass expenses on to buyers.

Upcoming Devices

Meanwhile, Apple is preparing to release its first foldable handset, known as the Duo, with preorders starting on October sixteen and sales beginning on October twenty-three at a starting price of nineteen ninety-nine dollars. Chief executive John Ternus oversaw the September nine launch event in New York, marking a major milestone as investors watch to see if the foldable device can drive fresh demand.

Market Reactions

Wall Street firms have reacted cautiously to the developments. Morgan Stanley kept its buy-equivalent rating on Apple shares but lowered its price target to three hundred fifty-five dollars, pointing out that lower selling prices and higher memory costs offset revenue gains. Earlier in August, Jefferies downgraded the stock to underperform due to supply chain issues involving a cancelled all-glass model. Apple shares recently traded around three hundred twenty-nine dollars in early October, sitting four percent below their high of three hundred forty-five dollars and thirty-four cents recorded on September twenty-two.

Context

Global technology supply chains are currently strained due to surging demand for high-performance memory chips used in artificial intelligence data centers. When component expenses rise sharply across the tech sector, hardware makers often face difficult choices between absorbing the extra costs or raising retail prices, both of which can impact profit margins and consumer demand.