Apple Inc. (NASDAQ:AAPL) is said to be “drastically” scaling back production orders for its new iPhone Air and redirecting resources toward other models in the iPhone 17 lineup, according to a report from Nikkei citing unnamed industry sources.
Apple shares slipped 0.7% in premarket trading in the U.S.
The decision comes amid lower-than-expected consumer interest in the Air model, which was introduced as a lighter and more affordable option within the iPhone 17 family.
The shift follows a survey from KeyBanc Capital Markets released earlier in the day, which found “virtually no demand for iPhone Air, and limited willingness to pay for a foldable,” analysts led by Brandon Nispel wrote.
“We see ASPs, not units, being the driver of growth in FY26. With AAPL trading at ATHs, we see the stock as expensive and pricing in lofty expectations though we are lacking a bear case,” the analyst said.
KeyBanc’s research also pointed to steady but selective interest in the broader iPhone 17 lineup, noting that the mix is “continuing to shift toward Pro and Pro Max models.” The firm expects Apple to deliver a fiscal fourth-quarter iPhone revenue beat, followed by in-line performance in the first fiscal quarter, buoyed by stronger initial shipments and higher average selling prices.
“Midterm unit pressure offset by ASP uplift” is anticipated to support growth, the note said, adding that AI-driven features have not yet proven to be a major catalyst for purchases.
Meanwhile, Bloomberg reported that Apple’s development of a foldable iPad with a larger screen has run into technical obstacles, pushing back its launch timeline.
Together, the reports have heightened investor concerns over Apple’s ability to generate fresh excitement around new device formats, with many consumers opting to stick with the company’s premium but more traditional iPhone models.
Nikkei did not specify the scale of the production cuts or which suppliers might be affected, but analysts warn the changes could ripple through Apple’s Asian supply chain in the months ahead.