Apple (AAPL) shares dropped more than 1% on Friday, closing at $336.64, after a report said the company is cutting back on parts orders for its newest iPhones. Weaker-than-expected demand is being blamed on the higher prices attached to the iPhone 18 lineup.

A report from Nikkei Asia, citing two people familiar with the matter, said Apple told several suppliers to reduce component production for the iPhone 18 Pro and iPhone 18 Pro Max. October orders are down roughly 15% to 20% from what was initially planned, according to the report. Apple did not respond to requests for comment.

The reported cuts drew immediate attention from market watchers.

$AAPL reportedly cut iPhone 18 Pro component orders by 15% to 20% as higher prices weigh on demand. With memory costs pushing iPhone prices higher even Apple is starting to see limits of passing those costs to consumers. pic.twitter.com/STyhtoG5Cv — Shay Boloor (@StockSavvyShay) October 9, 2026 (via X)

Why Demand May Be Cooling

The iPhone 18 Pro and iPhone 18 Pro Max launched on September 9, and Apple raised prices on the new models by $100, pushing the Pro to $1,199 and the Pro Max to $1,299. The company also lifted prices across its iPad and Mac lines.

The steeper price tags trace back to a global shortage of memory and storage chips. AI data centers are consuming huge amounts of chip supply, pushing costs up across the technology industry and, ultimately, into the retail prices of consumer devices.

Sales looked strong in China during the first few weeks after launch, but global demand has reportedly weakened since then as the pricier components work their way into retail prices. Apple typically refreshes its iPhone lineup each September, and launch-quarter demand signals are closely watched by investors and suppliers alike, because orders placed in the weeks after launch inform production plans heading into the holiday quarter. One executive told Nikkei Asia that the company does not yet know how things will play out. It remains unclear whether Apple will adjust its orders again in November.

Uneven Impact Across the Supply Chain

The production cuts do not fall equally on all suppliers. According to the report, the reductions hit some suppliers but not all of them. Tata Electronics is a major manufacturer of the iPhone 18 Pro, while Taiwan Semiconductor Manufacturing Co. (TSMC) and Qualcomm also supply Apple with chips for the device.

Markets reacted on Friday. TSMC shares fell 1% in New York trading, while Qualcomm stock dipped only slightly.

Lead Time Data in Focus

Deepwater Asset Management's Gene Munster pointed to lead time data—the wait between ordering and delivery—as a useful gauge of demand. Lead times are widely watched as a proxy for underlying demand. Lead times for the iPhone 18 Pro have fallen 31%, while lead times for the larger iPhone 18 Pro Max actually rose 1%. Taken together, Munster said the numbers are now roughly in line with last year's iPhone 17 Pro launch.

Even so, Munster wrote that the fast decline in lead times in recent weeks softens the case for a strong December quarter, adding that the most recent data points matter most when reading these trends.

He also flagged Apple's upcoming foldable iPhone Duo as a wild card. The $1,999 device ships October 23 and could pull some buyers away from the Pro lineup. Munster expects first-year Duo unit sales near 20 million—double the roughly 10 million units some current estimates project.

Morgan Stanley Trims Price Target, Keeps Earnings View

Not every analyst is worried. Morgan Stanley's Erik Woodring said his team has not seen meaningful supply chain adjustments since the two phones launched, and he called Apple's product roadmap one of the most exciting in over a decade.

The bank kept its earnings outlook for the company largely unchanged, holding its EPS estimate near $10 for fiscal 2027 and close to $11 for fiscal 2028. It did trim its price target slightly, from $360 to $355, citing uncertainty around long-term monetization in Apple's services business.

The iPhone Duo launches October 23, early in the holiday quarter, and its early sales performance will be the next major data point for investors watching the lineup. Apple's December quarter, which spans the holiday shopping season and opens Apple's fiscal year, is historically its largest by revenue.

This article originally appeared on CoinCentral.