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Apple 'cuts iPhone production' as it pledges to focus on healthcare services

James Cook
Apple chief executive Tim Cook - AP

Apple has reportedly cut production volumes for its iPhones by 10pc for the first three months of 2019 as it focused on healthcare-related services.

Nikkei reported on Wednesday that production across all models of iPhones would decrease by an average of 10pc in this quarter.

The Japanese publication cited a source with knowledge of Apple’s iPhone production who said that a plan to produce between 47m and 48m devices had been revised to between 40m and 43m iPhones.

The report of fresh cuts to iPhone production follows a previous report in November which said that the business was planning to reduce its orders of new iPhones.

Earlier this month, Apple issued its first cut to its sales forecast since 2002. It warned that iPhones sales were below expectations during the final three months of 2018, blaming an economic slowdown in China.

The company said that it would report revenues of around $84bn (£67bn) for the three months to the end of December.

Bank of America Merrill Lynch analysts said that Apple may be facing an “informal boycott” in China causing some consumers to purchase competitors’ smartphones.

In an interview on CNBC on Tuesday evening, Apple chief executive Tim Cook disputed analyst claims that its new iPhone had flopped.

“I call bologna on that,” he said. He went on to explain that the iPhone XR, which Apple released last year, has become the most popular iPhone. “Do I want to sell more? Of course I'd like to sell more. And we're working on that,” he said.

Elsewhere in the interview, Mr Cook said that Apple plans to release new services in 2019 that will become a “material” source of revenue for the business.

“You will see us announce new services this year,” Mr Cook said, “there will be more things coming.”

Mr Cook also told CNBC’s Jim Cramer that he believes Apple’s developments in healthcare technology, including the features found in the Apple Watch, are its most important product.

“I believe, if you zoom out into the future, and you look back,” Mr Cook said, “and you ask the question, ‘What was Apple's greatest contribution to mankind,’ it will be about health.”