Apple cancelled the additional production of iPhone XR due to poor demand

Apple cancelled the additional production of iPhone XR due to poor demand

IT

Since it's the cheapest of the new iPhone trio, you'd expect the iPhone XR to be the best selling of the bunch, but apparently that's not how things work in Apple land.

Separately, Apple's stock was downgraded for the second time since its earnings report, this time by Rosenblatt Securities, which said it has lowered its expectations for iPhone production and shipments, CNBC reported here on Monday. It's entirely possible that the reason Apple doesn't need very many XR's is that most customers are choosing the highest-end models or defaulting to the lower-end, cheaper products.

Apple has told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR which launched last month, the Nikkei reported on Monday. This means that Foxconn might only produce some more 100,000 units daily to reflect the new demand outlook. And ultimately, after Apple's continued considerable success, I'm not willing to bet that the company got its customer read wrong this soon after the iPhone's triple launch.

Cutting corners: iPhone manufacturers are not able to make full use of their production capabilities and are closing down unneeded assembly lines.

It's too early to tell if the iPhone XR will have a similar fate as the iPhone 5C. The strong quarter, however, was driven by the older models, iPhone 8 and iPhone X. These phones are about 20 percent less expensive than the iPhone XR.

Meanwhile, Pegatron, which is another key partner of the Cupertino-based tech giant, has had to "suspend plans to ramp up production", now "awaiting further instructions", according to supply chain sources that are typically right about these things.

A smaller third assembler, Wistron, originally tapped to be on standby for rush demands, will also reportedly not receive rush orders this season.

Interestingly, the iPhone 8 and iPhone 8 Plus have had orders increase by more than 5 million units. Apple previously planned 20 million units for the older iPhone models this quarter, but raised the figure to 25 million units, the individual said.

  • Terrell Bush