• by Thom Forbes  @tforbes, January 6, 2016

Apple is cutting order forecasts to its iPhone suppliers, according to a story in the Wall Street Journal, “sending ripples throughout the multibillion-dollar industry that supplies and builds the company’s phones.” Eva Dou reports, for example, that the government of a Chinese provincial capital has set aside more than $12 million in subsidies to keep workers on the line at Foxconn Technology Group, according to sources. 

That story was followed by a report in Japan’s Nikkei Asian Review that iPhone output would decline by about 30% in the first quarter because inventories “have piled up at retailers in developed markets like China and Europe amid lackluster sales while an increase in the dollar against emerging markets currencies has made the phone more expensive in those countries,” according to Bloomberg’s Molly Schuetz.

“The report prompted a 2.5% drop in Apple shares, which have lost about a quarter of their value from record highs in April, reflecting worries over slowing shipments. Shares in the mainly Asian makers of the iPhones' screens and chips were also sharply lower on Wednesday,” according to a Reuters report.

“This is an eye-opening production cut which speaks to the softer demand that Apple has seen with 6s out of the gates,” FBR Capital Markets analyst Daniel Ives told investors. “The Street was bracing for a cut but the magnitude here is a bit more worrisome.”

“It’s really more evidence that things are getting worse,” Brian Blair, principal and co-founder of Grays Peak Capital, said on CNBC's “Closing Bell.” CNBC’s Fred Imbert and Jacob Pramuk report that “Blair noted that analysts have so far seemed to ignore supply chain ‘weakness.’” 

Count Patrick Moorhead of Moor Insights & Strategy among them. He said yesterday that he was not seeing a global slowdown in iPhone sales and was skeptical about the reports that production was lagging, according to Reuters.

Yet other observers have seen it coming all along.

“Coming off a booming year of iPhone sales with new models that offered few noticeable changes, analysts warned that Apple would struggle to grow demand of its flagship product,” the WSJ’s Dou writes. “In October, Apple Chief Executive Tim Cook said it expected iPhone sales to increase in its fiscal first quarter ended in December from the same period a year earlier, but declined to make projections further out into the future.”

Fortune’s Don Reisinger reminds us that “several analysts, including those at Morgan Stanley, JP Morgan, and Barclays, said that Apple had reduced component orders on its latest handsets” last month, following predictions of “a year-over-year iPhone shipment decline of 15% in the quarter ending in March.”

But Morgan Stanley analyst Katy Huberty said back then that she thought Apple’s market share would hit record levels in 2016 and that “it’s possible Apple’s supply chain has done a fine job of building more than enough iPhones, and the company has simply decided to wind things down for a period so it’s not overwhelmed with stock.”

“Apple is expected to refresh its iPhone line with a smaller model that would replace the discontinued 5C, in the spring, and the iPhone 7, probably in September,” report Brett Molina and Jon Swartz for USA Today. FBR Capital Markets analyst Ives tells them Apple needs to “‘clear the decks’ with inventory in Asia this spring ahead of iPhone 7, which is expected to be a big seller.”

Apple shipped 48 million phones in the third quarter for a 13.5% market share, up from 11.8% in the same quarter a year earlier, according to IDC data. “Most of the smartphone demand and growth is, however, expected to come from low to mid-range handsets, particularly in emerging markets, the research firm said,” writes John Ribeiro for IDG News Service.

Apple, as is its wont, would not comment on the flurry of reports yesterday.