Consumer electronics giant Apple (AAPL) reportedly has slashed production of its iPhone 12 handsets while raising initial build plans for its upcoming iPhone 13 devices. Apple stock fell on Wednesday.
Nikkei Asia reported Wednesday that Apple is cutting orders for all iPhones by about 20% for the first half of 2021, compared with the plans reported in December. The majority of the production cuts are for the iPhone 12 Mini, its cheapest 5G-enabled smartphone. Sales of the Mini model have disappointed since its launch last November.
Late last year, Apple told suppliers to secure components to build up to 96 million handsets for the first six months of 2021, Nikkei said. It is now targeting production of about 75 million units, slightly above iPhone shipments in the year-earlier period, the news outlet said.
Apple did not respond to a request for comment on the report.
Apple Stock Added To ‘Best Ideas List’
On the stock market today, Apple stock fell 0.9% to 119.98.
Wedbush Securities analyst Daniel Ives, a longtime Apple bull, on Wednesday reiterated his outperform rating on Apple stock. He has a 12-month price target of 175 on AAPL stock.
Ives added Apple stock to the firm’s “best ideas list,” saying the recent pullback in shares represents a “great entry point.”
After the company’s December-quarter report, Wall Street has been anticipating some modest cuts to iPhone forecasts for the company’s fiscal year, which ends Sept. 25, Ives said. That expectation is reflected in the sell-off in Apple stock since late January, he said.
Apple stock notched a record high of 145.09 on Jan. 25.
IPhone 13 Build Plans Look Strong
The initial build plans for the iPhone 13 series look strong, Ives said. Apple is likely to announce the next-generation iPhones in September, he said.
“Initial Asia supply chain builds for iPhone 13 are currently in the 100 million unit range compared to our initial iPhone 12 reads at 80 million units (pre-Covid) and represents a 25% increase year over year out of the gates,” Ives said.
Those build plans show Apple’s confidence in the 5G smartphone upgrade cycle, Ives said. Plus, Apple should benefit from the reopening of the economy as the Covid-19 vaccine gets distributed, he said.
Apple stock has an IBD Composite Rating of 68 out of 99, according to the IBD Stock Checkup tool. IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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