The drop follows lower-than-expected holiday sales for the premium iPhone.
Apple is believed to have started considering an increase to proportion of liquid crystal display iPhone models by reducing production of the OLED screen models scheduled for release this year.
The iPhone X features facial recognition and wireless charging, but it is widely regarded as lacking in groundbreaking new technologies compared with previous models.More news: Prepare for a rare celestial trifecta: Super Blue Blood Moon
According to another industry executive cited in the report, Apple will not directly control prices because it's against their policy. It will also be a setback for Samsung's display business, which has enjoyed strong performance so far.
Should an iPhone SE sequel launch in 2018, Kuo predicts it would get a faster processor and a lower price.
Apple was not immediately available for comment when contacted by CNBC.
Samsung already reduced OLED production for the iPhone X by 10%, a report said last week.More news: Prince Alwaleed freed: The end of Saudi's corruption crackdown?
"Our checks indicate a 6.5-inch smartphone is on the horizon for Apple in mid 2018", the GBH Insights analyst told The Sun. The projected weak iPhone X sales are not likely to have a negative impact on the overall growth of iPhone models in the market.
The group also asked Apple to lay down their concrete plans to address the matter in relation to the affected iPhone users in China.
Some of the things that were reiterated in this latest report were firstly that all of the new phones will have no home button at all and will include the, sometimes criticized, notch for TrueDepth sensors.More news: Mauricio Pochettino: Tottenham Hotspur have transfer window options