Apple (NASDAQ:AAPL) shares declined 1.9% in US premarket trading on Friday following reports that the company had reduced component orders for its recently introduced iPhone 18 Pro and iPhone 18 Pro Max models amid weaker-than-expected demand and rising production costs.
According to Nikkei Asia, which cited multiple sources familiar with the situation, Apple has instructed some suppliers to scale back production of components used in its latest premium smartphones.
The report indicated that Apple had adopted a more cautious approach to shipment expectations since early September, with component orders for October reduced by approximately 15% to 20% compared with initial projections.
Apple shares were trading 1.9% lower in premarket dealings as of 05:15 ET (09:15 GMT), reflecting investor concerns about demand for the company’s newest devices.
The reported adjustments come as smartphone manufacturers face higher component costs and uncertainty over consumer spending.
The reported reduction in component orders follows indications that demand for Apple’s latest premium smartphones has fallen short of earlier expectations.
According to Nikkei Asia, rising prices for memory chips and other electronic components have increased manufacturing costs, contributing to higher retail prices for some devices.
These price increases may be affecting consumer purchasing decisions, particularly in markets where smartphone replacement cycles have lengthened.
The report suggested that Apple had become more conservative in its production planning as it assessed initial demand for the iPhone 18 Pro and Pro Max.
A reduction in component orders can indicate changes in expected sales volumes, although it does not necessarily translate directly into an equivalent decline in finished-device shipments.
Manufacturers regularly adjust procurement schedules to account for inventory levels, product availability and changes in production requirements.
Nevertheless, the reported cuts have raised questions about the strength of demand for Apple’s premium smartphone range during the current sales period.
Nikkei Asia also indicated that Apple’s revised product launch strategy could be contributing to the reduction in component demand.
Unlike previous release schedules, the company introduced its premium iPhone 18 models first, launching the iPhone 18 Pro, iPhone 18 Pro Max and iPhone Duo in September.
The standard iPhone 18 and an upgraded iPhone Air are scheduled to follow in early 2027.
This staggered launch approach could affect the timing of component orders and production volumes across Apple’s smartphone portfolio.
Rather than preparing for simultaneous releases across the entire product range, suppliers may be adjusting their manufacturing schedules to reflect separate launch periods.
The report noted that the standard iPhone gained popularity with the iPhone 17 generation last year.
Demand for the upcoming base iPhone 18 could therefore provide an additional source of sales when the device becomes available.
However, the commercial impact of the revised launch schedule will depend on customer preferences, pricing and overall smartphone market conditions.
The reported production adjustments also highlight broader supply pressures affecting the consumer electronics industry.
Demand for memory chips and other electronic components has increased substantially as technology companies invest in artificial intelligence infrastructure.
The expansion of AI data centres requires significant quantities of advanced memory and semiconductor products, placing additional pressure on manufacturing capacity.
As suppliers allocate resources to meet demand from AI-related applications, consumer electronics manufacturers face tighter availability and higher prices for certain components.
These conditions can increase production costs for smartphones, computers and other electronic devices.
Recent comments from memory chip manufacturer Micron indicated that supply constraints could persist well into 2027.
If shortages continue, manufacturers may face further challenges in balancing product pricing, production volumes and profitability.
For Apple, the ability to manage component procurement costs will remain important as it prepares additional iPhone launches.
The reported reduction in iPhone 18 Pro component orders has introduced additional uncertainty surrounding Apple’s near-term smartphone sales performance.
Premium iPhone models are an important part of the company’s product portfolio, making demand trends relevant to revenue and profitability expectations.
However, the reported 15% to 20% reduction applies to certain component orders for October rather than Apple’s total iPhone production or overall sales forecast.
The distinction is important because supplier orders can fluctuate for reasons unrelated to final consumer demand, including inventory management and changes to manufacturing schedules.
Apple’s staggered release strategy also complicates comparisons with previous iPhone launches.
The introduction of the standard iPhone 18 and upgraded iPhone Air in early 2027 could shift some sales activity into a later period.
Investors will therefore be monitoring further indications of demand, supplier production trends and Apple’s financial results to assess the impact of the reported adjustments.
Friday’s premarket decline reflected concerns about weaker demand for premium devices and the effects of rising component costs, although the full implications for Apple’s smartphone business remain uncertain.
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