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Apple (NASDAQ:AAPL) shares fell Friday after the tech giant told some of its suppliers to cut production of components for its recently launched iPhone 18 Pro and Pro Max models, Nikkei Asia reported on Friday, citing multiple sources familiar with the matter.
The technology giant was seen turning more conservative on shipments since early September, with component orders for October being cut by 15%-20% from what was originally expected, the Nikkei reported.
Apple shares slid 2.3% in early U.S. trading by 09:48 ET (13:48 GMT).
The cuts came amid weaker-than-expected market demand for the new iPhone line, as soaring memory chip and component prices forced price hikes and dented consumer demand, the Nikkei report said.
But the Nikkei report said the weaker component demand could also be driven by Apple changing its launch schedule for the 18 series, with the company first launching the premium line– the 18 Pro, Pro Max, and the iPhone Duo– in September.
The company will launch the base iPhone 18 and an upgraded iPhone Air in early-2027. The base model iPhone was seen gaining increased popularity last year with the iPhone 17 line, and may bring in more sales for the company.
Still, the Nikkei report highlighted the growing headwinds faced by consumer electronics companies, as they struggle with rising component costs.
Global memory and electronics supplies were largely crimped by outsized demand from the artificial intelligence industry. Recent comments from memory chip major Micron suggested that this tightness was likely to persist well into 2027.
Therefore, Apple has instructed certain suppliers to scale back orders of parts destined for the iPhone 18 Pro and iPhone 18 Pro Max, according to Reuters, citing Nikkei Asia.
The cuts come as the iPhone 18 Pro lineup carries higher price tags than its predecessors. The iPhone 18 Pro starts at $1,199 and the iPhone 18 Pro Max at $1,299 — each $100 more than the prior year's models, following Apple's fall hardware event last month.
Although Apple unveiled the iPhone 18 lineup at an event in New York on Sept. 9. The company has not released a standard iPhone 18 model and is expected to introduce one in the spring.
The order reductions arrive as Apple prepares for the launch of its first foldable device, the iPhone Duo, which is set to go on sale Oct. 23 at an entry price of $1,999 after preorders open Oct. 16. The Duo's debut is also the first major product release under CEO John Ternus, who took on the role on Sept. 1.
Wall Street has been weighing the higher pricing across Apple's fall lineup against rising memory costs. Morgan Stanley kept a buy-equivalent rating on Apple stock last week while lowering its price target to $355 per share, noting that weaker-than-anticipated selling prices for the latest iPhones, combined with higher memory costs, largely offset small gains in revenue estimates, leaving its earnings-per-share projections for fiscal years 2027 and 2028 roughly flat.
Concerns about Apple's ability to sustain higher average selling prices have circulated on Wall Street since August, when Jefferies downgraded Apple stock to underperform, citing supply chain checks suggesting the company had canceled a planned all-glass iPhone due to low production yields. Analyst Edison Lee had viewed that device as a key tool for lifting average selling prices across the product line.
Thus Apple stock was trading at roughly $329 per share in early October, down more than 4% from a 52-week high of $345.34 reached on Sept. 22.
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