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Why Is Apple Scaling Back iPhone 7 Orders?

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Dec. 22 2016, Updated 10:38 a.m. ET

Demand has decreased in China

DigiTimes stated that Apple (AAPL) is scaling back orders for the iPhone since sales for its recently launched iPhone 7 and iPhone 7S have been falling. According to DigiTimes, “The initial shipment momentum of the iPhone 7 was in part driven by strong demand for the jet black iPhone 7 models and in part by the mishap brought upon by Samsung Galaxy Note 7.”

DigiTimes further stated that demand for the iPhone in China and other markets has fallen significantly. Supply chain manufacturers expect shipments in the first six months of 2017 to fall 5.0 million units compared to the last six months of 2016.

iPhone sales in the United States (SPY), however, rose 7.0 percentage points YoY (year-over-year) from August 1–October 31, 2016, primarily driven by the launch of the iPhone 7.

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Are customers waiting for the iPhone 8?

Next year, 2017, will be the 10th year since the launch of the first iPhone. Apple most likely has a few surprises up its sleeve. Since 2016 will be Apple’s first year of YoY (year-over-year) shipment declines, the company will have to contend with competition from Google’s (GOOG) (GOOGL) Pixel and Samsung’s (SSNLF) flagship Galaxy Note product line.

Apple is reportedly analyzing nearly ten prototypes for next year’s iPhone, which is likely to be called the iPhone 8. Various rumors have been flying around about what the next iPhone could feature. Even if only some of what’s being said is true, the fact remains that Apple needs to debut a special or significantly redesigned iPhone to regain excitement that the iPhone brand has recently lost. This has happened amid stiff competition in the smartphone market.

There’s been speculation that Apple is working on radical designs for its iPhone 8, which could include a curved display. Other reports have suggested that Apple could launch certain models of the iPhone 8 with an OLED (organic light-emitting diode) display.

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