Apple's stock is down 2.0% in pre-market trading after a supply-chain report revealed that the company has asked its component suppliers to cut production orders for the iPhone 18 Pro and iPhone 18 Pro Max by at least 15% for October, with some estimates suggesting a reduction as high as 20%. This adjustment, first reported by Nikkei Asia, indicates a significant shift in demand expectations, as Apple adopted a more cautious approach to shipments starting in early September.
The production cutback appears to stem from rising memory chip costs and the subsequent price increases passed on to consumers. Apple had raised iPhone prices to counterbalance surging DRAM and NAND costs, but the higher prices seem to have cooled buyer interest more than anticipated, prompting the company to scale back supply chain orders to avoid excess inventory.
While the appointment of Steve Smith as Apple’s new head of mergers and acquisitions drew some attention, it had little impact on the stock’s performance. The broader market context offers limited support, as the Nasdaq dropped sharply on Thursday due to concerns over OpenAI’s revenue revision, affecting AI-linked and semiconductor stocks. However, Friday’s pre-market trading shows a recovery in progress for the S&P 500 and Nasdaq, indicating that Apple’s decline is driven by company-specific issues rather than ongoing macroeconomic pressures.
The supply-chain demand signal from Nikkei Asia is the primary factor weighing on Apple shares this morning. With the stock trading near its 52-week high of $345.34 and investor expectations elevated ahead of a busy October product calendar, including a second launch event planned for October 27, any signs of weakening iPhone demand carry significant weight, as reflected in today’s pre-market move.