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Apple reportedly shrinks iPhone orders

Is it cooling demand, excess stock or something else at work?

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Don't look now, but Apple may be facing a rough patch. Wall Street Journal sources claim that Apple has cut its iPhone order forecasts to suppliers in the "past several months." Moreover, some Chinese factories making the handset have had idle capacity and let people go on holiday early -- this isn't the usual post-holiday dip. The city of Zhengzhou also gave Foxconn (Apple's main iPhone manufacturer) $12 million to help 'stabilize' the workforce, although it's unclear whether or not this is directly related to the apparent reduction.

Not surprisingly, Apple isn't commenting on what's happening. It wouldn't want to tip off competitors, and there's not much point when it's due to post its fiscal results on January 26th. If Apple is comfortable with revealing anything about what's going on, you'll hear about it then.

Whether or not this spells trouble (assuming it's accurate) is up in the air. It's tempting to suggest that demand is poor, but it could also reflect overly optimistic production or a transition to a new model (say, the fabled 4-inch iPhone 6c) ahead of the usual September update window. It would make sense if low demand was at work, though. China's economy is slowing down, which would hurt one of Apple's hottest growth areas. Also, the iPhone 6s isn't as dramatic an update as last year's model -- there just isn't as much incentive to upgrade. If that's the case, Apple might have a tough time until the next big iPhone rolls around.

[Image credit: AP Photo/Eric Risberg]

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