NEW YORK — Apple Inc. fell Monday to the lowest price in 11 months after the Nikkei newswire reported that production of the iPhone was cut on weak demand.
Apple ordered about half the 65 million iPhone 5 displays it originally targeted for this quarter, Nikkei said, citing an unnamed executive at a component maker. Manufacturing curbs have been widely known since December, according to Steven Milunovich and Mark Moskowitz, analysts at UBS and JPMorgan Chase, respectively.
“Order cuts appear to be old news,” Milunovich wrote. He said he reduced his iPhone sales estimates in December after checks with suppliers indicated a reduction in the number of phones being made.
Last month, Apple cut production by about 30 percent, which may be the result of inventory rebalancing or lower consumer demand, Milunovich wrote in a research report today. Order cuts may also be due to suppliers becoming more adept at building the latest iPhone, reducing the need for Apple to order excess parts, Moskowitz wrote in a note to clients Monday. “The bigger message related to any potential order cuts could be that iPhone 5 manufacturing yields and thereby gross margin are on the rebound,” Moskowitz said. He said that his projection for 25 million iPhone 5 units to be sold in the quarters ending in December and in March will be exceeded under the scenario Nikkei reported.
The stock fell 3.6 percent to $501.75 in New York, the lowest closing price since Feb. 15. Apple extended its decline to 28 percent since hitting a record high in September. Bethan Lloyd, a spokeswoman for Apple in Britain, didn’t return calls seeking comment. IPhone sales could be slowing because smartphones are already common in developed markets, said James Cordwell, an analyst at Atlantic Equities Service in London.